I'm seeing a lot of comments saying EU's action is "retroactive" or "retrospective" - it is not. The EU law was always there, and Apple and Ireland were both in contravention for all the 13 years. Apple was in compliance with Irish laws, while contravening EU law.

If the IRS audits you and finds that you underpaying taxes for 13 years - you are going to pay all the taxes "retrospectively"! There isn't a 5-year statute of limitations on illegal EU subsidies (or IRS tax evasion).

The rest of my point remains though - this is not a new law, but a decades-old one.

See the actual EU press release: http://europa.eu/rapid/press-release_IP-16-2923_en.htm

"The Commission can order recovery of illegal state aid for a ten-year period preceding the Commission's first request for information in 2013"

The rules against state aid were always there in the various EU constitutional documents. Ten years is a long time, but it takes a long time to investigate complex issues and you don't want a system where it becomes worthwhile to stall the investigation and run out the clock.

The real message is that companies should refrain from trying to do "deals" with individual member states; doing so is extremely divisive. One of the arguments going around at the time of Brexit (I have no idea whether it's true though!) was claims of EU grants being used to move car part production out of the UK to Eastern Europe.

Edit: in fact, if you go through to http://ec.europa.eu/competition/state_aid/cases/253200/25320... and read the description, it appears to date all the way back to 1991, where Apple sat down with the Irish revenue and simply decided how much tax they were going to pay. That's how transfer pricing works.

Not entirely - any monies returned can legally only be used to pay back Ireland's national debt. The UK, Germany, and France are the biggest holders of Ireland's debt, so effectively the money is going back to them, albeit with Ireland benefiting by reducing its debt marginally.

Source: http://www.irishtimes.com/business/economy/european-commissi...

EU legislation on state aid has always been this way. It's a usual thing to force a company (Apple) to pay back government subsidies (incl tax subsidies) to a member state (Ireland), which says it doesn't want the money.

Member states granting illegal subsidies almost always say they believe the subsidies were legal or that no subsidies were granted.

2) Doesn't matter who gets the money. It's forcing corporations to not use Ireland as a tax haven anymore (there are others like Luxembourg, etc., but it's a step in the right direction)

This creates a system where even information from the national government charging taxes in its own jurisdiction can't be relied upon, and where literally billions of euros of tax can be retrospectively demanded indefinitely. That is a toxic environment for anyone running a business, even someone trying to do so honestly. If the EU wants to wade in after this much time and claim this much damage has been going on, it's going to strain credibility and the EU is going to deserve all the contempt that businesses will hold it in as a direct result.

I write this, BTW, as someone who runs small businesses in the UK that very much are at a disadvantage compared to the arrangements available to large multinationals. I'm all in favour of having a tax system that is transparently fair, where the same rules apply to everyone. But I'm not in favour of officially saying one thing, letting businesses carry on accordingly for a very long time, and then retrospectively changing the rules.

I think it's also worth mentioning that the EU's track record on tax issues and dealing with the large multinationals and their complex arrangements is awful. Just look at the hash they made of the VAT changes last year, which were supposedly going to have a beneficial effect by reducing multinational tax avoidance, but in fact did almost exactly the opposite, causing far more damage to smaller businesses than larger ones.

Apple's tax arrangements may be ethically questionable, and the system that permits those arrangements has plenty of room for improvement. However, if you think this specific move isn't a politically motivated cash grab by an EU that is in trouble and has several key elections coming up, I heard there are some Nigerian princes who have some great investment opportunities to offer you.

This is I think one of the few genuine substantial complaints against EU membership: the EU is very bad at dealing with small businesses, because they don't have time and money to get involved in the legislative process. Brussels is too far away.

This isn't to do with a contract or treaty as much as how it's interpreted and how that interpretation has changed recently. What's changed in the past 18 months is how the EU Commission interprets the arms' length principle as it relates to international tax law, now using it's own guidelines instead of the international norm/consensus, i.e.: OECD Transfer Pricing Guidelines. 'Retroactive' is definitely the right word to use.

>> Doesn't matter who gets the money

Perhaps, but it matters who loses it. The US Treasury see it as their money, since the untaxed cash hoard being referred to is on the Apple Inc. balance sheet. The implications for the EU could be far reaching.