Ruth Mason (Virginia; Google Scholar) & Stephen Daly (King's College London; Google Scholar), What Went Wrong in the Apple State Aid Case: Part 1 – The Case , 44 Va. Tax Rev. 351 (2025):

This article—Part 1 in a series of two—offers a detailed and accessible reconstruction of the Apple state aid case, widely regarded as the European Commission’s most high-profile effort to challenge corporate tax avoidance via state aid enforcement. Drawing on primary documents, the authors trace the procedural and legal development of the case—from the Commission’s investigation and final decision to the lower and upper court rulings. The article explains the Commission’s reasoning for finding that Ireland conferred illegal state aid on Apple, including its controversial use of an “allocation-by-exclusion” method and reliance on transfer pricing standards that were not in effect at the time of the contested tax rulings. The case implicated two complex legal domains—state aid and transfer pricing—and turned on whether Ireland’s branch profit allocation method deviated from a valid legal reference base.

While this first article is primarily descriptive, providing a comprehensive factual and legal record of the Apple proceedings, it lays the groundwork for the authors’ critical evaluation in a companion piece. The authors underscore that the Commission’s reliance on retroactively applied OECD standards and an ambiguous conception of the “arm’s-length principle” raised serious procedural and substantive questions. By clarifying the sequence and content of the Commission’s arguments, this article aims to correct misconceptions and offer a reliable foundation for assessing what went wrong in the EU’s most consequential tax state aid case to date.

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