The news follows a three-year probe into Apple’s Irish tax affairs, which culminated in claims from European Union (EU) competition officials that rulings made by the Irish Government in 1991 and 2007 had allowed the corporation to ‘unlawfully’ minimise its tax bills.

A final ruling on Tuesday suggested that Ireland should recover up to €13 billion (£11 billion) from Apple in back taxes.

‘Member states cannot give tax benefits to selected companies – this is illegal under EU state aid rules,’ said EU Commissioner Margarethe Vestager.

‘Fundamental freedom’

Rufus Ballaster, partner at City law firm Carter Lemon Camerons, said that companies should be entitled to a ‘fundamental freedom’ to know the amount of one’s success which will be subject to tax, and the level of tax which will be imposed.

He said: ‘The idea that a business can face a retrospective tax charge for having agreed a deal with a country in which it expanded following that deal – a charge possibly imposed decades later – is a massive constitutional problem, and one which may well cause problems rippling in current and future activity.

‘We see some of the world’s largest and most successful corporations under attack recently about the tax they are paying and the business practices they have adopted, and this is sure to prevent any sympathy emerging from the media or the population generally.’

Contextual reactions

He suggested that different contexts would likely produce very different reactions: ‘If a whole industry were saved with jobs and areas preserved from mass redundancy because a major company is persuaded to rescue it, the idea that years later the ‘White Knight’ may be told by a supra-national power that it must pay more tax would offend sensibilities. 

‘Even worse, it reduces the likelihood of a state in the future managing to attract a similar rescue bid if there is another industry in crisis.

‘If what a sovereign state offers to a business in return for it doing certain activity in that state is not something upon which the business can rely in the future, we have a degree of business uncertainty which is potentially catastrophic,’ he added.

‘European federalism’

James Colclough, partner at City accountancy Wilder Coe, had his own views: ‘This is less about tax avoidance but more about the supra-national and increased European federalism.

‘The easiest thing would be for the US to abandon its continued taxation by citizenship and its belief that all things foreign are abhorrent.

‘The US does not take Base Erosion and Profit Shifting (BEPS) seriously, which in my humble opinion is the best solution for countering multinational tax avoidance.’