The Apple logo is seen on an Apple Store in a shopping center in La Jolla, California, United States, December 17, 2019. Portal/Mike Blake/File Photo Acquire License Rights
LUXEMBOURG, Nov 9 (Portal) – An EU court made a legal error when it ruled in favor of Apple in a 13 billion euro ($14 billion) tax ruling and should reconsider the case, a top court aide said Europe on Thursday, a possible setback for the iPhone maker.
The tax case against Apple was part of EU antitrust chief Margrethe Vestager’s crackdown on deals between multinational corporations and EU countries that regulators viewed as unfair state aid.
The European Commission said in its 2016 decision that Apple had benefited for more than two decades from two Irish tax rulings that artificially reduced its tax burden to just 0.005% in 2014.
The European Union General Court upheld Apple’s lawsuit in 2020, saying regulators had not met the legal standard to show that Apple had enjoyed an unfair advantage.
However, EU Court of Justice (ECJ) Advocate General Giovanni Pitruzzella disagreed, saying ECJ judges should overturn the court’s ruling and send the case back to the lower court.
“The court’s ruling on the ‘tax rulings’ issued by Ireland in relation to Apple should be overturned,” he said in a non-binding statement.
He said the court made a number of legal errors and also failed to “correctly assess the content and consequences of certain methodological errors which, according to the Commission’s decision, rendered the tax rulings flawed”.
“It is therefore necessary for the court to make a new assessment,” Pitruzzella said.
The ECJ, which will rule in the coming months, follows around four out of five of these recommendations.
Ireland reiterated that it had not granted state aid to Apple.
“It is important to remember that this opinion is not part of the judgment of the Court of Justice of the European Union, but will be taken into account by the Court of Justice in making its final decision,” Michael McGrath said in a statement.
“It has been and remains Ireland’s position that the correct level of Irish tax has been paid and that Ireland has not provided state aid to Apple.”
Although Apple and Dublin appealed the tax order, Apple was still required to pay out the entire amount that Ireland had placed in escrow.
The Irish government has long said that other EU member states will claim they are entitled to some of the back taxes even if it loses its appeal and is allowed to keep the money.
“We thank the court for its time and continued review of this case. “The court’s ruling was very clear that Apple did not receive any selective advantage or state aid, and we believe that this should be upheld,” an Apple spokesperson said.
Vestager has had a mixed record defending its tax cases in court, with judges supporting lawsuits by automakers Stellantis (STLAM.MI), Amazon (AMZN.O) and Starbucks (SBUX.O).
Her biggest legal victory to date came in September, when the court upheld her decision against a €700 million Belgian tax scheme for 55 multinational companies. Their tax crackdown has forced EU countries to scrap such bargain deals.
Vestager is currently investigating IKEA brand owner Inter IKEA’s Dutch tax agreement in a 2017 case, Nike’s (NKE.N) Dutch tax rulings and Finnish food and beverage packaging company Huhtamaki’s (HUH1V.HE) tax rulings issued by Luxembourg.
The Apple case is C-465/20 P Commission v Ireland and Others.
($1 = 0.9346 euros)
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