Michelle ThompsonThe European Court of Justice’s top advisor believes that a decision made three years ago in favor of the computer behemoth should be overturned.
In its fight against an order to pay an alleged €13 billion (£11.3 billion) tax bill in Ireland, Apple has suffered a setback as a top advisor to the European Court of Justice (ECJ) stated that a decision in favor of the tech corporation should be overturned.
This is the most recent development in an almost ten-year-old controversy concerning claims that Apple benefited from favorable tax status in Ireland to the tune of €13 billion. The tech giant supported the Irish government in opposing a payment order issued by Europe’s antitrust commission.
Michael McGrath, Ireland’s finance minister, acknowledged the advocate general’s view of the European Court of Justice but expressed confidence that no EU regulations had been broken.
“Ireland has always maintained that Apple did not receive any state assistance from Ireland and that the appropriate amount of Irish tax was paid.”
He declared, “We now await the court of justice of the European Union’s ruling on this matter.”
The action against Apple began in 2014 when Margrethe Vestager, the competition commissioner at the time, opened an inquiry into two Irish tax rulings that she believed had been used to unfairly reduce the amount of tax owed since 1991.
It was discovered that the business had only been permitted to charge a “effective corporate tax rate” of 1% on its earnings made in Europe in 2003 and 0.005% in 2014.
After two years, the European Commission declared that the benefits received between 1991 and 2014 were unlawful state aid and mandated Ireland to get its money back.
Dublin and Apple contested that ruling right away.
The European Commission’s judgment was overturned by the general court of the European Union three years ago because the Commission failed to provide evidence that the tax benefit came from tax rulings.
Giovanni Pitruzzella, the attorney general for the European Community Justice (ECJ), sided with the commission on Thursday, arguing that the court’s judges ought to overturn the general court’s decision and send the matter back to the lower tribunal.
In a non-binding decision, Pitruzzella stated, “The judgment of the general court on ‘tax rulings’ adopted by Ireland in relation to Apple should be set aside.”
He said that when the general court decided that Brussels “had not shown to the requisite legal standard” that Apple’s earnings from sales of its products outside of the US had to be allocated to their Irish subsidiaries, it had made “a series of errors in law.”
The ECJ stated in a statement that “it is therefore necessary for the general court to carry out a new assessment.”
Apple was forced to release the entire sum, which Ireland has been keeping in an escrow account, while the legal process drags on.
