European Union Tribunal Upholds Ruling Against Apple in Tax Dispute

European Union Tribunal Upholds Ruling Against Apple in Tax Dispute

A legal advisor to the top European Union court has identified legal errors in the EU tribunal's decision favouring Apple in a $14 billion tax dispute. This recommendation for a case re-evaluation poses a significant challenge to Apple's victory.

The legal advisor, Advocate General Athanasios Rantos, has urged the European Court of Justice to overturn the tribunal's ruling, arguing that the commission's decision to grant Apple a favourable tax deal in Ireland was unlawful. Rantos's opinion is not binding, but it carries significant weight and often influences the court's final decision.

If the European Court of Justice upholds Rantos's recommendation, Apple could face a significant financial setback, potentially requiring the company to repay billions of dollars in taxes to the Irish government. The ruling could also have broader implications for other multinational corporations that have benefited from similar tax arrangements.

The legal action targeting Apple's tax practices was part of a broader initiative by Margrethe Vestager, the European Union's antitrust chief, to investigate agreements between multinational corporations and EU member states that regulatory authorities considered to provide unfair state aid, as reported by The Economic Times.

In its 2016 ruling, the European Commission determined that Apple had benefited from two Irish tax decisions implemented over two decades, resulting in an artificial reduction of its tax liability to a mere 0.005 per cent in 2014.

In 2020, the General Court of the European Union upheld Apple's objection, arguing that regulators had not met the legal criteria to establish that Apple had received an unjust advantage. However, Advocate General Giovanni Pitruzzella at the EU Court of Justice (CJEU) dissented, suggesting that CJEU judges should annul the General Court's decision and send the case back for further review by the lower tribunal.

Even though Apple and Dublin filed appeals against the decision, Apple was still obligated to transfer the entire sum, held in an escrow account by Ireland. The Irish government has consistently maintained that, in the event of an unsuccessful appeal and retention of the funds, other European Union member states may assert demands for a portion of the overdue taxes.