Apple has faced a major setback in its longstanding €14.3bn tax dispute with the EU after an adviser to the bloc’s highest court said an earlier ruling over the tech giant’s business in Ireland should be thrown out and the case re-run.
Advocate General Giovanni Pitruzzella of the EU Court of Justice said in an advisory opinion that Apple’s win in a lower EU court should be shelved because of a series of legal errors. “It is therefore necessary for the General Court to carry out a new assessment,” Pitruzzella said.
While the opinion is non-binding, such statements often hold sway over final judgements made by the EU’s highest court. The court is set to rule on the case in the coming months.
Spanning a seven-year period, the case is the most high-profile of EU watchdog chief Margrethe Vestager’s campaign against so-called “sweetheart” deals that offer multinational companies favourable tax terms in EU states.
Much to the furry of the Cupertino giant, back in 2016, Vestager accused Apple of benefitting from “substantially and artificially lowered the tax” in Ireland since 1991. The Commission believed that tax arrangements between Ireland and Apple constituted illegal state aid, giving the tech giant an unfair advantage over its competitors.
In 2016, the Commission found Apple guilty of underpaying taxes totalling €13.1bn between 2003 and 2014 and ordered it to pay the money to Ireland along with €1.2bn worth of interest — totalling a whopping €14.3bn. The money was subsequently recovered from Apple and placed in an escrow fund.
Apple and Ireland of course appealed the decision and the case was heard in the EU’s General Court (its second highest) over two days in 2020. They won the case, and the court overturned the judgement. However, the money remained in the escrow account in case the EU decided to appeal — which it did.
And that’s where we find ourselves now, and that’s why Pitruzzella’s words carry so much weight. The Apple versus EU tax dispute concerns one of the largest corporate tax fines in history (in fact a recovery order, technically not a fine). Should the EU’s top court overturn the 2020 decision, the Commission will be given a fresh opportunity to extract its proverbial pound of flesh.
What happens now remains to be seen, but I for one will be grabbing the popcorn to watch the next chapter of this case unfold — in all its legal wishy-washy glory.