Apple is threatened with a new lawsuit over billions in back taxes

Apple is threatening a setback in the years-long dispute with the European Commission over a tax payment of 13 billion euros in Ireland. In the appeal procedure before the European Court of Justice (ECJ), Advocate General Giovanni Pitruzzella concluded in his judgment that an earlier decision in favor of Apple should be annulled.

The opinions of the Advocate General are not binding, but the court often follows them. A ruling from the Court of Justice is expected next year.

In 2016, the European Commission asked Apple to pay €13 billion in back taxes in Ireland. The EU court declared the additional requirement invalid in 2020. The judges argued that the Commission had failed to prove that Apple’s 1991 and 2007 tax treaties constituted prohibited state aid in Ireland.

The European Commission appealed to the Court of Justice. In his opinion published on Thursday, Advocate General Pitruzzella ruled that the case had to go back to the EU Court for a new decision due to several legal errors.

Apple disagrees

Apple disagreed with the assessment: “The ruling of the General Court of the EU clearly states that Apple did not receive any selective advantage or state aid, and we believe this should be upheld.”

The iPhone group has always emphasized that the income of the two Irish subsidiaries in question was mainly taxable in the US. That’s why Apple felt like it had to pay twice. The Commission also failed to convince the court that Apple received special terms in Ireland that were not available to other companies.

The EU Court’s ruling was a painful setback for the Brussels authority and for Competition Commissioner Margrethe Vestager personally.

Vestager’s accusation: Apple paid significantly less than the 12.5 percent rate that applies to everyone – for trading company Apple Sales International, corporate tax fell to 0.005 percent. The Commission had also criticized Apple for creating a system in which foreign reserves were virtually tax-free.

According to the ‘Paradise Papers’ published by law firm Appleby in 2017, Apple was even looking for a country where the company did not have to pay taxes at all.

(sda/awp/dpa)