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Apple has run into a setback in its appeal against an order to pay an €13bn (£11.3bn) tax bill in Ireland, after advocate general Giovanni Pitruzzella at the European court of justice (ECJ) said a ruling in the tech company’s favour should be dismissed.
As the proceedings are ongoing, Apple has handed over the full amount in question, which Ireland had in an escrow account.
The update is part of a 10-year dispute over allegations that Apple received favourable tax status in Ireland which resulted in an £11.3bn benefit. During that time, the tech giant sided with the Irish government in battling the ECJ’s order to pay the amount.
The case was launched in 2014 by the then-competition commissioner Margrethe Vestager, which investigated two tax rulings in Ireland that she suspected had artificially lowered the tax due since 1991.
It is understood that Vestager found that the company had been allowed an “effective corporate tax rate” in 2003 of just 1% on its European profits and just 0.005% in 2014.
In response to the ECJ’s opinion on the matter, Ireland’s finance minister, Michael McGrath, said he remains confident that the country did not breach any EU laws.
McGrath said: “It has always been, and remains, Ireland’s position that the correct amount of Irish tax was paid and that Ireland provided no state aid to Apple. We now await the judgement of the court of justice of the European Union on this matter.”
However, in 2016 the European Commission concluded that the benefits Apple received between 1991 and 2014 amounted to illegal state aid and ordered Ireland to recover the money. This led to Apple and the Irish government immediately challenging that decision.
In 2020, the general court of the EU annulled the European Commission’s decision on the grounds that it had not shown any tax advantage derived from tax rulings.
On Thursday (9 November), Pitruzzella sided with the commission, saying the court’s judges should set aside the general court ruling and refer the case back to the lower tribunal.
Pitruzzella reasoned that the general court had committed “a series of errors in law” when it ruled that Brussels “had not shown to the requisite legal standard” that the profit Apple had made on sales of its products outside the US had to be attributed to their Irish branches.
The ECJ said in a statement: “It is therefore necessary for the general court to carry out a new assessment.”
