EU Court to Deliver Verdict on Apple-Ireland Tax Appeal this Month

The Court of Justice of the European Union (CJEU) is set to deliver its verdict on September 10th in a highly anticipated appeal involving Apple and the Irish Government, as reported by Breaking News. This ruling will be a critical moment in a legal battle that has drawn significant attention across Europe and beyond.

The European Commission is seeking to overturn a previous decision made by the General Court of the CJEU, which annulled the Commission’s ruling that Apple had underpaid taxes totaling €13.1 billion to Ireland from 2003 to 2014. This earlier ruling, if upheld, would mark a significant defeat for the Commission’s efforts to clamp down on what it sees as unfair tax practices by multinational corporations operating within the European Union.

The case has its roots in tax rulings issued by the Irish Government in 1991 and 2007. These rulings approved the method by which Apple Sales International and Apple Operations Europe, both of which are not tax residents in Ireland, calculated their chargeable profits from activities carried out by their Irish subsidiaries. According to Breaking News, the European Commission argued in 2016 that these tax arrangements constituted illegal state aid, asserting that Ireland had granted Apple an unfair advantage in violation of EU internal market rules. Consequently, the Commission ordered Ireland to recover the alleged unpaid taxes from Apple, amounting to €13.1 billion, along with an additional €1.2 billion in interest.

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However, in a major setback for the Commission, the General Court of the CJEU annulled this decision in 2020, stating that the Commission had failed to demonstrate that Apple had gained an advantage from the tax rulings. Now, the CJEU is preparing to rule on an appeal by the Commission against this judgment. Last November, a CJEU advocate general issued a legal opinion recommending that the court should overturn the General Court’s ruling and send the case back for further consideration. The advocate general argued that the General Court had committed several legal errors in its decision. While such opinions are not legally binding, they are typically followed by the CJEU in most cases.

Both the Irish Government and Apple have consistently denied that the tech giant benefited from any special tax treatment. Nonetheless, Apple transferred €14.3 billion into an escrow account in 2018, pending the outcome of ongoing legal challenges related to the Commission’s original determination. As of the end of last year, the value of this fund stood at €13.774 billion, according to recent figures.

The upcoming ruling by the CJEU is expected to have far-reaching implications for the European Commission’s ability to pursue similar cases against other multinational companies accused of benefitting from favorable tax arrangements within the EU.

Source: Breaking News