EU Court Advisor Supports $14 Billion Tax Ruling Against Apple
A lower tribunal that had previously ruled in favor of Apple, dismissing a 13-billion-euro ($14 billion) EU tax order, has been criticized for making legal errors by an advisor to the European Union’s top court. This development poses a potential setback for the tech giant.
The tax case against Apple is part of a broader effort led by EU antitrust chief Margrethe Vestager to address what regulators view as unfair state aid in deals between multinational corporations and EU countries.
In 2016, the European Commission issued a decision stating that Apple had benefited from two Irish tax rulings for over two decades, which had artificially reduced its tax liability to as low as 0.005% in 2014.
However, in 2020, the General Court upheld Apple’s challenge, asserting that regulators had failed to meet the legal standard for proving that Apple had received an unfair advantage.
Advocate General Giovanni Pitruzzella, serving at the EU Court of Justice (CJEU), has now recommended that CJEU judges set aside the General Court’s ruling and send the case back to the lower tribunal.
According to Pitruzzella, “The judgment of the General Court on ‘tax rulings’ adopted by Ireland in relation to Apple should be set aside.” His opinion is non-binding but highlights the errors in law made by the General Court, and its failure “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings.”
The CJEU is expected to issue a ruling in the coming months, and it often follows four out of five such recommendations.
This case is identified as C-465/20 P Commission v Ireland and Others.
Key points to consider in this situation:
- Background of the Dispute: Apple’s dispute with the EU revolves around allegations of receiving preferential tax treatment in Ireland, which led to a significantly reduced tax burden. The European Commission claimed that this constituted unfair state aid.
- EU Antitrust Efforts: The case against Apple is part of a broader effort by EU antitrust chief Margrethe Vestager to crack down on deals between multinational corporations and EU countries that are viewed as providing unfair advantages through favorable tax rulings.
- European Commission’s 2016 Decision: In 2016, the European Commission issued a decision asserting that Apple had benefited from two decades of favorable Irish tax rulings, resulting in a tax rate as low as 0.005% in 2014.
- General Court’s 2020 Ruling: In 2020, the General Court ruled in favor of Apple, arguing that regulators had not met the necessary legal standard to prove that Apple had received an unfair advantage.
- Advisor’s Critique: Advocate General Giovanni Pitruzzella, an advisor to the EU Court of Justice, has recommended that the CJEU judges overturn the General Court’s ruling. He cited a series of legal errors made by the lower tribunal and its failure to properly assess the methodological errors that were alleged to have affected the tax rulings.
- CJEU Decision Pending: The final decision now rests with the CJEU, which is expected to issue its ruling in the coming months. Typically, the CJEU follows the recommendations of its advisors in a majority of cases.
This development underscores the ongoing legal battle between Apple and the EU over alleged unfair tax advantages and the importance of the CJEU’s upcoming decision in determining the outcome of this high-stakes case.
A lower tribunal that had previously ruled in favor of Apple, dismissing a 13-billion-euro ($14 billion) EU tax order, has been criticized for making legal errors by an advisor to the European Union’s top court. This development poses a potential setback for the tech giant.
The tax case against Apple is part of a broader effort led by EU antitrust chief Margrethe Vestager to address what regulators view as unfair state aid in deals between multinational corporations and EU countries.
In 2016, the European Commission issued a decision stating that Apple had benefited from two Irish tax rulings for over two decades, which had artificially reduced its tax liability to as low as 0.005% in 2014.
However, in 2020, the General Court upheld Apple’s challenge, asserting that regulators had failed to meet the legal standard for proving that Apple had received an unfair advantage.
Advocate General Giovanni Pitruzzella, serving at the EU Court of Justice (CJEU), has now recommended that CJEU judges set aside the General Court’s ruling and send the case back to the lower tribunal.
According to Pitruzzella, “The judgment of the General Court on ‘tax rulings’ adopted by Ireland in relation to Apple should be set aside.” His opinion is non-binding but highlights the errors in law made by the General Court, and its failure “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings.”
The CJEU is expected to issue a ruling in the coming months, and it often follows four out of five such recommendations.
