In the latest development of the ongoing tax dispute involving Apple, the European Union, and Ireland, a top legal adviser to the European Court of Justice has suggested that a previous ruling that allowed Apple to escape €13bn (£11bn) in back taxes be reconsidered.
This long-standing legal battle experienced a significant turn when Advocate General Giovanni Pitruzzella at the Court of Justice called for the case to be re-examined. He expressed that the 2020 decision in favor of Apple was marred by “legal errors” and a failure to accurately evaluate the tax rulings’ methodology as determined by the European Commission.
In 2016, the European Commission had initially ruled that the low tax rates granted to Apple by the Irish government amounted to illegal state aid, a position that symbolized the Commission’s crackdown on what it perceived as extensive tax avoidance by multinational corporations.
Responding to this latest development, an Apple spokesperson reiterated that the company did not receive any “selective advantage” or state aid and expects the previous ruling, which cleared Apple of the need to pay back taxes, to stand.
The Irish government, for its part, has stood by its decision to not recover the back taxes from Apple, justifying the move as a necessary sacrifice to maintain the country’s attractiveness to large multinational firms. Ireland’s corporate tax rate is among the lowest in the EU, a policy that has made it the regional hub for many large corporations, including Apple, Tiktok and Microsoft to name a few.
Despite national autonomy on corporate tax rates, the EU maintains authority to regulate state aid, arguing that Ireland’s tax arrangements with Apple constituted an unfair competitive advantage.
This unfolding legal saga gained a fresh twist after the General Court ruled two years ago that the European Commission’s demand for tax repayment was legally flawed. With the Advocate General’s new statement, the case against Apple and the Irish government may be poised for a dramatic resurgence.
