The Advocate General of the Court of Justice of the European Union takes a stand against Apple. In his opinion, the judgment that overturned the EU Commission’s back payment decision is incorrect.
Apple suffered a defeat in the tax dispute with the EU over an additional payment of 13.1 billion dollars to the tax authorities in Ireland. According to the Advocate General of the Court of Justice of the European Union, Giovanni Pitruzella, the judgment that overturned the EU Commission’s additional demand in 2020 is incorrect.
“In the opinion of the Advocate General, the court made a number of legal errors,” one said Press release of the Court of Justice of the European Union. According to the court, the Commission had not sufficiently proven that the tax relief agreed with Ireland also benefited Apple in the USA and therefore constituted an illegal subsidy.
Methodological errors in the court decision
According to the Advocate General, the Commission’s alleged methodological errors in the tax agreement between Ireland and Apple were “not sufficiently appreciated” by the Court. This is also why “a renewed assessment by the court is necessary”.
The dispute is about 13.1 billion euros, which, according to the EU Commission, Ireland is said to have illegally granted Apple as a tax break. The EU sees this as an illegal subsidy and therefore called on the Irish government to demand the money back in 2016. In September 2018, Ireland finally reported receipt of the payment. Ireland and Apple also sued the EU Commission.
It is still unclear whether the European Union court will now have to rehear the case. The Advocate General emphasizes that his assessment is not binding on the court. The Court will now discuss the proposed decision and issue a judgment at a later date.
The iPhone manufacturer, like other large international corporations, is pursuing a tax avoidance strategy in the EU. Among other things, the European branches must license the intellectual property developed by Apple in the USA. The license costs, in turn, eat up a large portion of the profits generated in the EU. Apple argues that profits should be taxed where the most important decisions are made – i.e. not in the EU.