European Commission claims mistakes were made in Apple tax ruling

1 Feb 2021427 Views

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The EU’s competition watchdogs are building their appeal of last year’s ruling where Apple’s €13bn tax bill in Ireland was dropped.

The European Commission claims mistakes were made in last year’s Apple tax ruling that led to the €13bn tax bill in Ireland being scrapped.

The Commission is seeking to overturn last July’s verdict from the European General Court. It found that Apple did not have to pay €13bn in back taxes in Ireland as the Commission failed to prove that Apple enjoyed an unfair advantage.

The decision is being appealed to the Court of Justice of the European Union, in a final effort to force the iPhone maker to pay.

The long winding case goes back to 2016 when the European Commission found that Apple wrongfully reduced its tax bills in Ireland to a fraction of a percent with the taxes owed totalling €13bn.

Apple and Ireland have fought the ruling, claiming Apple paid its taxes as per the law and the State provided no unwarranted aid.

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Last summer’s ruling that the European Commission’s assertions were incorrect was a major blow to the Commission and competition regulator Margrethe Vestager, who has pursued several cases against US tech giants.

In a court filing published today (1 February), EU lawmakers argued that the General Court misinterpreted the original decision. It said that the ruling interpreted the Commission’s investigation as being determined by a lack of employees based at the Apple subsidiaries that were being probed. It said the court did not fully consider its findings, which also included assessments of intellectual property routed through these Irish branches.

“The General Court’s failure to properly consider the structure and content of the decision and the explanations in the Commission’s written submissions on the functions performed by the head offices and the Irish branches is a breach of procedure,” the filing said.

It added that the General Court’s “reliance on inadmissible evidence in support of its finding” was also a breach of procedure.

The case is expected to commence this year and will be a last-ditch effort from the European Commission to rein in multinationals’ tax strategies by setting a precedence with Apple.

Its track record with appeals in these types of cases has been patchy though, losing a high-profile tax case to Starbucks in 2019.

Jonathan Keane is a freelance business and technology journalist based in Dublin

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