What prompted the investigation?

The genesis of the European Commission probe into Apple's tax affairs in Ireland was the company's admission to a US Senate subcommittee in May 2013 that parts of its Irish business were "stateless" for tax purposes.

It also told that subcommitee that it had a special deal with the Irish government on corporation tax, although the company has since done a U-turn on this point and has publicly contradicted its earlier assertion to the subcommittee.

The revelations immediately spurred the EC to enter into correspondence with the Irish State and also with Apple, on the basis that any special deal could constitute illegal state aid not available to all firms. It is not an investigation into Ireland's overall tax system, which does not fall under any EU competency.

What stage is it at now?

In June, after 15 months of correspondence, the EC announced a formal state aid investigation into Apple’s tax affairs in Ireland going back 10 years to 2004. This week, it will publish a detailed document setting out precisely what it is looking into and why.

The commission has not yet, however, made any finding of fact against Ireland or Apple. What will happen this week is merely the EC’s investigators setting out their prima facie case, based upon historical correspondence between the State and Apple that it has examined.

It is a bit like the prosecution setting out its case in a court battle. It isn’t the final ruling. The Irish government can keep fighting its corner before any official findings are made.

This is an intensely political issue, however, as Ireland’s tax system is notorious amongst some EU member states. The noise emanating from Brussels is that the EC may eventually find against Ireland.

What is likely to be Ireland and Apple’s defence?

It is a state aid investigation, so the Irish State as the provider of the alleged “illegal” state aid is the main focus of the investigation, as opposed to Apple.

Ireland will argue that it gave no special deal that would constitute State aid to Apple. It will argue that this is a technical tax matter - it was asked by the company to give an opinion on the basis of documents supplied about the legality of Apple’stax affairs here, and the State did so on a non-binding basis.

Ireland does not have a binding rulings-based tax system, and our corporate tax system is also based on the principle of self assessment. It is the company’s responsibility to make sure its tax affairs are legal.

Ireland will likely argue that it merely gave Apple an opinion based upon the rules applicable to all companiesat the time , and that it is always open to all companies to seek such opinions from the Irish State.

Could the investigation cost Irish taxpayers money in fines, or could it even result in a windfall, if Europe eventually finds against Ireland and Apple?

If it is eventually established that Ireland did indeed give illegal State aid to Apple, then it is possible the EC could order the country to recover the aid - the tax foregone - between 2004 and 2014.

This could potentially amount to several billion euro. Between 2004 and 2008 alone, Apple avoided more than €850 million in tax here.

Were Ireland to try and recover this tax from Apple, however, it is possible that it could spark a legal battle between the State and the company. Apple could potentially try to argue in the Irish courts that the State gave it comfort on the efficacy of its tax affairs here, and has no right to try and extract large sums now.

If Ireland were ordered to recover the State aid by the EC and failed to do so, the country could in theory face fines from Brussels.

For example, in May Spain was hit with €30 million in fines by the European Court of Justice for failing to recoup illegal State aid provided by some of its regions, under a 2001 commission finding.

As it is a State aid investigation, Apple may not be fined directly by the commission if the case is proven.

What happens next?

It will be months before the commission makes a formal finding, and when that happens Ireland will get another 30 days to formally respond.

If the EC were to maintain a stance that Ireland gave Apple illegal State aid, the State has already indicated that it is prepared to drag the issue out in the European courts. It has assembled a crack team of international lawyers in anticipation of this. This could take up to five years.

Were Ireland to lose the reputational damage would be immediate, however, and the consequences for foreign investment difficult to predict.