Brooklyn Journal of International Law


Nina Hrushko

First Page



In August 2016, after a two-year investigation, the European Commission issued a negative State aid ruling against Ireland, finding that the country had provided illegal tax benefits to Apple Inc. and requesting the government to collect €13 billion in retroactive taxes from the company. This decision sparked a heated debate around the globe about the European Commission’s authority to interfere into the individual EU Member States’ fiscal policies and order retroactive tax recoveries. This Note explores the application of EU State aid rules to tax laws and, in particular, EU Member States’ tax rulings, and discusses the European Commission’s investigations into the tax rulings of four EU Member States—Ireland, Luxembourg, the Netherlands, and Belgium. The Note then focuses on three major problems that arise as a result of the European Commission’s State aid decisions in the context of tax rulings—introducing uncertainty into the international tax systems via retroactive tax assessments, creating inconsistencies with the international tax norms and widely recognized OECD transfer pricing standards, and hindering direct foreign investment into the European Union. This Note argues that State aid investigations into EU Member State’s fiscal affairs are a poor mechanism for fighting tax avoidance and tax evasion in the European Union, and suggests alternative long- and short-term solutions to these issues.