Apple tax case to rumble on as EU appeals European court decision

25 Sep 2020183 Views

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The European Commission has announced it will appeal the ruling that said Apple does not have to pay Ireland €14.2bn in alleged unpaid taxes.

The European Commission (EC) has confirmed it will appeal the General Court of the EU’s ruling to annul the EC’s demand for Apple to pay €14.2bn in alleged unpaid taxes to Ireland. In a statement, EC executive vice-president Margrethe Vestager said the General Court had “made a number of errors of law” in its judgement earlier this year.

She added that the EC is now bringing the case before the European Court of Justice, as making sure all companies pay their fair share of tax “remains a top priority for the commission”.

“The General Court has repeatedly confirmed the principle that, while member states have competence in determining their taxation laws, they must do so in respect of EU law, including state aid rules,” Vestager said.

“If member states give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU. We need to continue our efforts to put in place the right legislation to address loopholes and ensure transparency.

“So, there’s more work ahead – including to make sure that all businesses, including digital ones, pay their fair share of tax where it is rightfully due.”

Government responds

Commenting on the EC’s decision to appeal the tax ruling, the Department of Finance reiterated its stance that the Irish branches of the Apple companies paid the full amount of tax due in accordance with the law.

“Ireland has not yet been served with formal notice of the appeal,” said Minister for Finance Paschal Donohoe, TD.

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“When it is received, the Government will need to take some time to consider, in detail, the legal grounds set out in the appeal and to consult with the Government’s legal advisers in responding to this appeal.”

In July, the EU court had said that the EC “did not succeed in showing to the requisite legal standard that there was an advantage” gained by Apple’s operations receiving the equivalent of State aid or better treatment than other companies.

Four years in the making

In its ruling at the time, the court said: “Although the General Court regrets the incomplete and occasionally inconsistent nature of the contested tax rulings, the defects identified by the commission are not, in themselves, sufficient to prove the existence of an advantage.”

The decision to appeal will see the EC, Ireland and Apple brought before the European Court of Justice and means litigation will continue at least for another few years. Today (25 September) was the deadline for the EC to confirm whether it was going to appeal the ruling.

The case dates back to 2016 when the EC directed Ireland to recover €13bn in unpaid taxes from Apple, plus interest. It claimed that two rulings in 1991 and 2007 issued by Revenue to Apple had “artificially lowered” the amount of tax that the tech giant would have to pay in Ireland, alleging this amounted to State aid.

The Irish Government and Apple launched an appeal against the 2016 EC ruling last September, with a lawyer representing the tech giant claiming that the ruling defied “reality and common sense”.

Updated 11.50am, 25 September 2020: This article was updated with comments from the Department of Finance.

Colm Gorey is a senior journalist with Siliconrepublic.com

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