Apple faces potential hurdle in EU tax battle, court adviser questions $14 bn ruling

Apple encountered a potential setback as an adviser to the European Union’s highest court contended that an EU tribunal made a mistake in its ruling, favouring Apple over a 13-billion-euro ($14 billion) tax order, Reuters reported on Thursday.  

The tax case, a part of EU antitrust chief Margrethe Vestager’s vigorous campaign against perceived unfair state aid between multinationals and EU nations, centres on Apple’s alleged benefit from two decades of Irish tax rulings, artificially diminishing its tax obligations. According to the European Commission’s 2016 decision, Apple’s tax burden plummeted to as low as 0.005 per cent in 2014. 

Advocate General Giovanni Pitruzzella at the EU Court of Justice (CJEU) challenges the General Court’s 2020 decision that upheld Apple’s appeal. Pitruzzella argues that the General Court made legal errors and failed “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings.”  

Recommending a reconsideration, he proposes setting aside the General Court ruling and referring the case back for a fresh evaluation. The CJEU is expected to make a final ruling in the upcoming months, following the usual practice of adopting about four in five such recommendations. 

Despite both Apple and Dublin appealing the tax order, Apple had to transfer the entire amount to an escrow account in Ireland. The Irish government reiterates its position, stating that it provided no state aid to Apple.  

Michael McGrath, an Irish official, maintained that Pitruzzella’s opinion doesn’t form part of the CJEU judgment but is considered in the final ruling. “It has always been, and remains, Ireland’s position that the correct amount of Irish tax was paid, and that Ireland provided no state aid to Apple,” Reuters quoted McGrath as saying. 

Reacting to the recent developments, an Apple spokesperson expresses gratitude to the court for its consideration, emphasising the General Court’s previous ruling that Apple received “no selective advantage and no state aid.”  

Margrethe Vestager, recognised for the tax crackdown, has experienced a mixed record in court, achieving victories against companies like Stellantis while facing setbacks in cases involving Amazon and Starbucks.  

Vestager is currently engaged in investigations into the tax arrangements of Inter IKEA, Nike, and Huhtamaki.  

(With inputs from Reuters) 

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