Commenting on the decision today by the European Commission to open a formal enquiry into a number of individual EU member states, a Department of Finance spokesperson said:
“The European Commission has today announced that it will open formal State Aid investigations in a number of Member States. This announcement is part of a wider investigation by the European Commission encompassing tax rulings and patent box regimes in a number of member states which has been on-going for some time.
In the case of Ireland, our understanding of the particulars of this case is that the Commission is focussing on advance opinions provided to a company a number of years ago which address the calculation of the taxable base of profits of this company.
Ireland is confident that there is no state aid rule breach in this case and we will defend all aspects vigorously. However, we understand that the European Commission has a responsibility to investigate potential breaches of state aid rules, so we will continue to do everything we can to ensure that they have the full information they require.
At the outset, it is important to be clear about the key facts of this state aid enquiry:
- At present the Commission is not saying that there is state aid, merely that they are formally examining this case.
- When they complete their investigation, they will publicly announce their decision. In the event of an unfavourable decision it will be open to Ireland to launch a legal challenge in the European courts.
- The enquiry is a very technical tax issue in a specific case and relates to one company with operations in Ireland.
- As is normal in state aid cases, it covers a 10 year period, 2004-2014.
- It is not about Ireland’s corporation tax rate. The Irish corporate tax system is not at issue, the enquiry relates to the application of the rules in one particular case.
- The company in question did not receive selective treatment and there was no ‘special tax rate deal’. Indeed, the company has publically clarified that there was no special deal.
We are very confident that we will successfully defend our position as Ireland does not have a statutorily binding tax ruling system. Like other tax administrations in other countries, the Revenue Commissioners, in certain limited circumstances, operate a system of non-binding advance opinions where companies can seek advice on the correct application of the law in their self-assessed tax filings. This facility is available to all taxpayers, including companies, both large and small.
Our technical experts do not believe that there is any state aid. We will now turn to providing our detailed, technical legal rebuttal of the Commission’s position and if necessary will defend our position in the European Courts.”