An EU tribunal made legal errors when it ruled in favour of Apple regarding a €13bn tax order and should review the case again, an adviser to Europe’s top court said on Thursday, in a potential setback for the iPhone maker.
The tax case against Apple was part of EU antitrust chief Margrethe Vestager’s crackdown against deals between multinationals and EU countries that regulators saw as unfair state aid.
In its 2016 decision the European Commission said Apple had benefited from two Irish tax rulings for more than two decades that artificially reduced its tax burden to as low as 0.005% in 2014.
The EU’s general court in 2020 upheld Apple’s challenge, saying regulators hadn’t met the legal standard to show Apple had enjoyed an unfair advantage.
But advocate-general Giovanni Pitruzzella at the EU Court of Justice disagreed, arguing the general court ruling should be set aside and the case referred back to the lower tribunal.
“The judgment of the general court on ‘tax rulings’ adopted by Ireland in relation to Apple should be set aside,” he said in a non-binding opinion.
The general court had committed a series of errors in law and had also failed “to assess correctly the substance and consequences of certain methodological errors that, according to the commission decision, vitiated the tax rulings”, Pitruzzella said.
“It is therefore necessary for the general court to carry out a new assessment.”
The EU Court of Justice, which will rule in the coming months, follows about four in five such recommendations.
Ireland reiterated it hadn’t provided any state aid to Apple. “It is important to bear in mind that this opinion does not form part of the EU Court of Justice judgment but is considered by the court when arriving at its final ruling,” Irish finance minister Michael McGrath said in a statement.
“It has always been, and remains, Ireland’s position that the correct amount of Irish tax was paid and that Ireland provided no state aid to Apple.”
While Apple and Dublin appealed against the tax order, the company nevertheless had to hand over the full amount, which Ireland has been holding in an escrow account.
The Irish government has long said that even if it loses the its appeal and gets to keep the money, other EU member states will make claims that they are owed some of the back taxes.
“We thank the court for its time and ongoing consideration in this case. The general court’s ruling was very clear that Apple received no selective advantage and no state aid, and we believe that should be upheld,” an Apple spokesperson said.
Vestager has had a mixed record defending her tax cases in court, with judges backing challenges by automaker Stellantis, Amazon and Starbucks.
Her biggest legal victory came in September when the general court upheld her decision against a €700m Belgian tax scheme for 55 multinationals. Her tax crackdown has forced EU countries to scrap such sweetheart deals.
Vestager is now investigating IKEA brand owner Inter IKEA’s Dutch tax arrangement in a case dating from 2017, along with Nike’s Dutch tax rulings and Finnish food and drink packaging company Huhtamaki’s tax rulings granted by Luxembourg.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.