By Daniel Hunter

The European Commission has today (Tuesday) explained its decision to launch an investigation into Apple's tax arrangements in Ireland.

It was yesterday revealed by the Financial Times that Apple's arrangement would be investigated by the European Commission.

The Commission sent a letter to all parties involved in June, but it has now been made public. It said: "The commission's preliminary view is that the tax ruling(s) in favour of the Apple group constitute state aid... the commission has doubts about the compatibility of such state aid with the internal market."

It means that the Commissions believes the arrangement between Apple and the Irish government amounts to state aid, which is against EU rules.

The Irish department of finance yesterday denied any wrong doing. It said: “Ireland is confident that there is no breach of state aid rules in this case and has already issued a formal response to the commission earlier this month.

“Ireland welcomed that opportunity to clarify important issues about the applicable tax law in this case and to explain that the company concerned did not receive selective treatment and was taxed fully in accordance with the law."

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