In a potential setback for Apple, an adviser to Europe’s top court suggested that a European tribunal made legal errors when ruling in favor of the tech giant over a €13 billion ($14 billion) tax order.
The tax case, dating back years, is part of the European Union’s crackdown on deals between multinationals and EU countries seen as unfair state aid.
The European Commission's 2016 decision accused Apple of benefiting from Irish tax rulings that significantly reduced its tax burden. Despite Apple challenging the ruling, the EU’s General Court upheld the challenge in 2020, asserting that regulators failed to prove Apple enjoyed an unfair advantage.
However, Advocate General Giovanni Pitruzzella at the European Court of Justice (ECJ) disagreed, stating that the General Court had committed legal errors and recommended a review of the case. The ECJ is expected to rule in the coming months, with approximately four in five cases following such recommendations.
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Ireland reiterated its position of providing no state aid to Apple, emphasizing that the adviser's opinion does not form part of the final judgment. Meanwhile, Apple had to hand over the full amount of the tax order, which Ireland held in an escrow account despite appeals.
An Apple spokesperson expressed gratitude for the ongoing consideration, emphasizing that the General Court's ruling stated Apple received no selective advantage or state aid.
The European antitrust chief Margrethe Vestager, known for her tax crackdown, has faced mixed results defending tax cases. Notably, in September, the General Court upheld her decision against a €700 million ($749 million) Belgian tax scheme for 55 multinationals.
The potential revisiting of the €13 billion tax order follows Apple being found not guilty three years ago of exploiting a legal loophole to save $14 billion in taxes owed to Ireland between 2003 and 2014. The European Commission's 2016 accusations centered on Apple's alleged preferential treatment and a 1% corporate tax rate in Ireland, deviating from the standard 12.5%.
The awaited ruling in the coming months will shed light on the fate of the tax case, with Ireland's finance minister, Michael McGrath, maintaining that the correct amount of Irish tax was paid, and no state aid was provided to Apple. Both parties must await the General Court's new decision before proceeding with the payment, closing a chapter on this longstanding matter.
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