Out of 254 State Aid fines since 1999, Ireland was only involved in 2 – Hayes
In the wake of the Apple state aid case, Brian Hayes MEP for Dublin and Member of the Economic and Monetary Affairs Committee said that Ireland has a strong track record when it comes to EU state aid rules, with only 2 fines recorded since 1999.
“Out of 254 State Aid fines imposed by the European Commission since 1999, Ireland has only been involved in two cases where the State was ordered to recover an amount from a company, according to official Commission statistics. One of these cases, involving Ryanair was ultimately overturned by the General Court and the other, involving an aluminium plant in Shannon, was also overturned by the General Court but has since been subject to an ongoing legal battle between the Commission, Ireland and the company in question.
“Taken into context, this means less than 1% of State Aid fines in the EU since 1999 have involved Ireland. Furthermore, there have been 147 State Aid cases taken by the Commission since 1999 where no fine has been ordered, of which Ireland has only been involved in two cases.
“Ireland has a history of treating EU State Aid rules very seriously. That’s why it is crucially important that we maintain our strong record on State Aid rules and appeal the Apple decision.
“Currently, 41 out of these 254 cases are pending and are being fought in the European courts. At the same time, 34 of these state aid cases are being dealt with in national courts. Several of these decisions have been overturned by the European Court of Justice.
“As we are now aware, both Ireland and Apple will appeal the decision. This appeal will take place before the EU’s General Court, one of the three bodies in the EU Courts. Based on recent experience of state aid court cases, this could up to three years to be decided. If either Apple or Ireland win this case, then the Commission will almost certainly appeal this decision to the Court of Justice, the highest court in the EU Courts. This could take another two years to be decided.
“It is important to note that Ireland has a strong record of ensuring that new fiscal or tax measures are not implemented unless and until they have been approved by the European Commission. This was confirmed in a recent report by A&L Goodbody. In fact, our current corporate tax rate of 12.5% did come about through a stand-off with the Commission. Before 1998, Ireland had two rates of corporate tax – 10% for the manufacturing sector and 32% for all other sectors. At the Commission’s insistence we settled on one rate of 12.5%.
“In terms of specific tax focus – since 1991, the Commission has concluded 65 State Aid cases specifically in relation to tax rulings or measures, involving 15 Member States. These tax investigations have become more common in recent years showing how the Commission is adjusting its approach to focus on Member States’ tax policy.
“Margrethe Vestager in 2015 wrote to MEPs on the Economic and Monetary Affairs Committee stating that the Commission can only act on tax measures if there are ‘concrete indications that selective advantages have been granted’. In the Apple case, there is absolutely no concrete indication of a selective advantage. The Revenue Commissioners in both 1991 and 2007, at the request of Apple, simply gave the company an assessment of how much tax they need to pay based on the economic activity generated in Ireland.
“The most important part of State Aid cases that come before EU courts is for the Commission to prove that there was ‘selectivity’ and an ‘economic advantage’ provided to a company. Both of these conditions must be fulfilled if the alleged measure is to be deemed illegal state aid.
“With the Apple case, the Commission has taken a new and unprecedented approach by using competition rules to encroach on taxation policy. The Revenue Commissioners independent system of enforcement is being put into question by the Commission. In fact, our whole tax regime is being put into question. This is not good for Ireland’s reputation or business environment.”