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Apple’s Battle Against a $14 Billion EU Tax Bill Faces a Setback

 |  November 9, 2023

In a potential setback for Apple, an adviser to Europe’s top court has stated that the EU tribunal made legal errors when it ruled in favor of the tech giant over a 13-billion-euro ($14 billion) tax order. The adviser, advocate General Giovanni Pitruzzella, has recommended that the case be reviewed again, potentially reopening the tax dispute. This development comes as part of the European Commission’s crackdown on deals between multinationals and EU countries that are seen as unfair state aid, reported Bloomberg. 

The European Commission’s 2016 decision claimed that Apple had benefited from two Irish tax rulings for over two decades, artificially reducing its tax burden to as low as 0.005% in 2014. However, the European Union’s General Court upheld Apple’s challenge in 2020, stating that regulators had not met the legal standard to prove Apple had enjoyed an unfair advantage.

Advocate General Pitruzzella disagrees with the General Court’s ruling, citing a series of errors in law and a failure to assess certain methodological errors that allegedly tainted the tax rulings. He argues that the General Court should set aside its ruling and refer the case back to the lower tribunal for a new assessment.

Related: EU Regulators Probe Deeper Into Apple Pay

The Court of Justice of the European Union (CJEU), which will make the final ruling in the coming months, typically follows around four in five recommendations from advocate generals. If the CJEU agrees with Pitruzzella, it would reopen the case and potentially lead to a different outcome.

Ireland, which has been at the center of this tax dispute, reiterated that it had not provided any state aid to Apple. The Irish government maintains that the correct amount of Irish tax was paid and that no state aid was involved. Despite the ongoing legal battle, Apple has already handed over the full amount of the tax order, which has been held in an escrow account by Ireland.

The outcome of this case is significant not only for Apple but also for other EU member states. The Irish government has warned that if it loses its appeal and gets to keep the money, other EU countries may make claims for a share of the back taxes.

Apple has expressed its belief that the General Court’s ruling, which stated that the company received no selective advantage or state aid, should be upheld. However, this setback in the fight against the tax order raises uncertainty about the final outcome.

Source: Bloomberg