(CTN News) – Apple is facing a potential setback after an EU tribunal ruled it had made legal errors when it sided with the iPhone maker in a tax dispute worth 13 billion euros ($14 billion).
Tax cases against multinational corporations were part of Margrethe Vestager’s crackdown on state aid deals between multinationals and EU countries. In 2014, Apple’s tax burden was artificially reduced to 0.005% by two Irish tax rulings that Apple had benefited from for more than two decades.
According to the General Court of the European Union, regulators had not met the legal standard to prove Apple had benefited unfairly.
Advocate General Giovanni Pitruzzella disagreed, saying CJEU judges should set aside the General Court’s decision and refer the case back to the lower court. According to him, the General Court’s judgment on the ‘tax rulings’ adopted by Ireland should be set aside.
The General Court committed a series of errors in law and failed to assess correctly certain methodological errors that vitiated the tax rulings, the Commission ruled. It is therefore necessary for the General Court to conduct a new assessment, Pitruzzella said.
It follows around four of five of these recommendations, which will be decided by the CJEU in the upcoming months.
In a statement, Ireland reiterated that no state aid had been provided to Apple. In a statement, Michael McGrath explained that this opinion is not part of the judgment of the Court of Justice of the European Union, but is considered by the Court when it comes to a final ruling.
“Ireland has always maintained that the correct amount of Irish tax was paid to Apple and that Ireland did not provide any state aid to Apple.”
However, Apple still had to hand over the full amount, which Ireland kept in an escrow account while appealing the tax order.
According to the Irish government, even if the government loses the appeal and keeps the money, other EU member states will claim that they are owed some of the back taxes.
The court has been very patient and thoughtful in considering this case. We thank you for your time and consideration. According to a spokesperson for Apple, “The General Court ruled clearly that Apple received no selective advantage nor state aid. We believe that ruling should stand.”
During her time as a tax litigator, she has had a mixed record of success, with judges supporting Stellantis, Amazon, and Starbucks in her tax cases.
To date, her biggest legal victory has been the General Court’s decision to overturn a 700-million-euro Belgian tax scheme for 55 multinational companies in September. EU countries have been forced to scrap such sweetheart deals as a result of her tax crackdown.
In a case dating from 2017, Vestager is investigating Inter IKEA’s Dutch tax arrangement, as well as Nike’s Dutch tax rulings and Huhtamaki’s Luxembourg-granted tax rulings.