The contention from the Commission appears to be that, even though there were no written agreement, the shockingly low tax rate (apparently 0.005% in 2014) suggests that there was a de facto arrangement. When the European lawyers began to look at Apple’s convoluted tax structures, shifting money between shell entities and a ‘head office’ that didn’t employ staff, possess facilities or even have a registered address in any country, it appeared that there was the blatant breach of tax codes.
By looking into these structures, the EC was effectively doing the job that the Irish tax authorities should have done years ago. Had Ireland engaged in a cursory investigation into Apple’s tax affairs, these anomalies would have been identified and a new tax bill drawn up.
Ireland in fact made a number of tax rulings to assign Apple’s tax center to its ‘head office’. That this facility was a stateless fiction appeared irrelevant to Irish authorities.
Apple has always claimed that the company never broke the law regarding taxes. The company exploited loopholes, and used very complicated networks of shell companies, but they have always claimed it was legal. This article suggests that “there was blatant breach of tax codes” because Apple did not report all its income.
It’s one thing to take advantage of the situation and do something that’s morally wrong, but if what Apple did was illegal, then they no longer have the high ground in this case.