State Aids, Tax Rulings, and Multinational Firms: A View from Europe

As U.S. states eagerly offer incentives in an effort to win the sweepstakes for Amazon's HQ2, it is worth revisiting the very different world in Europe. In 2016 the European Commission (EC) decided that Ireland's favorable tax treatment of Apple was illegal state aid that distorted competition, and the Commission has ordered Ireland to recover €13 billion. The Apple case is one of several similar cases recently brought by the EC, in connection with both U.S. firms and European ones, including Starbucks, FIAT, McDonald's, and, most recently, Amazon itself. The U.S. Treasury, in turn, has expressed its concerns regarding the EC's approach in this area, particularly as applied to U.S. companies, in a white paper issued in August 2016. Professor Amedeo Arena discusses these issues, addressing the EC decisions and their appeals before EU courts, the U.S. Treasury white paper's objections to the EC approach, the EU legislator's recent initiatives to increase the transparency of tax rulings, and the procedural aspects of the recovery of the alleged state aids, against the background of the codification of EU administrative procedure