Europe facing the challenge of taxing multinationals: state aid – the apple case

• Pages: 173-185
• Author: Hugo López López

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EUROPE FACING THE CHALLENGE OF TAXING

MULTINATIONALS: STATE AID – THE APPLE CASE

HUGO LÓPEZ LÓPEZ



Public University of Navarre (UPNA). Spain.

SUMMARY: 1. INTRODUCTION. 2. BASIC CONCEPTS OF INTERNATIO-

NAL TAXATION: TAX RESIDENCE; SOURCE–BASED TAXATION; AT-

TRIBUTION OF PROFITS TO PERMANENT ESTABLISHMENTS. 3. THE

APPLE CASE. 4. LEGAL ASSESSMENT. 5. FINAL CONSIDERATIONS. 6.

BIBLIOGRAPHY.

1. INTRODUCTION.

One of the main challenges currently facing the European Union and the

world as a whole is the effective taxation of the profits obtained by multinational

companies. As highlighted in another chapter of this book,1 this problem stems

from two distinct phenomena.

On the one hand, from the behaviour of the multinational companies

themselves. In recent decades, we have witnessed the phenomenon of base

erosion, through which multinationals shift or allocate profits and expenses

derived from their activities to specific jurisdictions in an attempt to obtain tax

savings. Hence, what characterizes the operation of entities that form part of a

multinational enterprise is that the transactions they carry out with one another

are not necessarily subject to market forces and the spontaneous price formation

1 CASTRO BOSQUE, M., “Europe facing the challenge of taxing multinationals: the global

minimum tax”, in this handbook.