Apple shocked by EU court’s order to review tax order case

An EU tribunal made legal errors in ruling in Apple’s favor on a 13 billion euro (roughly Rs. 1,16,000 crore) tax order and should review the case again, an adviser to Europe’s top court said on Thursday. Said in possible shock. For iPhone manufacturer.

The tax case against Apple was part of EU antitrust chief Margrethe Vestager’s crackdown on deals between multinationals and EU countries that regulators saw as unfair state aid.

The European Commission said in its 2016 ruling that Apple benefited over two decades from two Irish tax rulings that artificially reduced its tax burden by 0.005 percent in 2014.

In 2020, the General Court of the European Union upheld Apple’s challenge, saying regulators had not met the legal standard to show that Apple had gained an unfair advantage.

But Giovanni Pitruzzella, Advocate General at the EU Court of Justice (CJEU), disagreed, saying that CJEU judges should annul the General Court’s decision and send the case back to a lower tribunal.

“The decision of the General Court on the ‘tax rulings’ adopted by Ireland in relation to Apple should be annulled,” he said in a non-binding opinion.

He said the General Court made several errors in law and also “failed to properly assess the essence and consequences of certain methodological errors which, according to the Commission’s decision, vitiated tax decisions”.

“It is therefore necessary for the General Court to make a new assessment,” Pitruzzella said.

The CJEU, which will rule in the coming months, follows four of five such recommendations.

Ireland reiterated that it has not given any government aid to Apple.

“It is important to note that this opinion is not part of the decision of the Court of Justice of the EU, but is taken into account by the Court when reaching its final decision,” Michael McGrath said in a statement.

“Ireland’s position has always been and will remain that the correct amount of Irish tax was paid and that Ireland did not provide any state aid to Apple.”

While Apple and Dublin appealed the tax order, Apple was still required to hand over the full amount, which Ireland has held in an escrow account.

The Irish government has long said that even if it loses its appeal and succeeds in keeping the money, other EU member states will claim it is owed some back taxes.

An Apple spokesperson said, “We thank the court for its time and ongoing consideration of this case. The General Court’s decision was very clear that Apple received no selective advantage and no state aid, and our Believe it should be retained.”

Vestager has a mixed record defending her tax cases in court, with judges supporting challenges from automaker Stellantis, Amazon and Starbucks.

His biggest legal victory to date came in September when the General Court upheld his decision against a Belgian tax scheme worth 700 million euros (about Rs 6,250 crore) for 55 multinational companies. Their tax action has forced EU countries to cancel such sweetheart deals.

Vestager is currently investigating a 2017 case into the Dutch tax treatment of Inter Ikea, owner of the Ikea brand, the Dutch tax rulings of Nike and the Luxembourg tax rulings of Finnish food and beverage packaging company Huhtamäki.

© Thomson Reuters 2023


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