Apple faces new lawsuit over billions in back taxes
Apple is facing a setback in its long-running dispute with the EU Commission over a back tax payment of 13 billion euros in Ireland. In the appeal proceedings at the European Court of Justice (ECJ), Advocate General Giovanni Pitruzzella came to the conclusion in his opinion that an earlier decision in Apple's favor should be overturned.
The Advocate General's opinions are not binding, but the court often follows them. A ruling by the ECJ is expected next year.
In 2016, the EU Commission ordered Apple to pay 13 billion euros in back taxes in Ireland. The EU court declared the additional claim null and void in 2020. The judges argued that the Commission had not been able to prove that Apple's tax agreements in Ireland from 1991 and 2007 constituted prohibited state aid. The Commission appealed to the ECJ. Advocate General Pitruzzella found in his opinion published on Thursday that the case should be sent back to the EU Court for a new decision due to various legal errors.
Two subsidiaries are at issue
Apple disagreed with the assessment: "The judgment of the General Court of the EU clearly states that Apple did not receive a selective advantage and no state aid, and we think this should be upheld."
The iPhone company always emphasized that the income of the two Irish subsidiaries in question was primarily taxable in the USA. Apple was therefore asked to pay twice. The Commission was also unable to convince the court that Apple had received special conditions in Ireland that were not available to other companies.
The ruling of the EU court was a painful setback for the Brussels authority and Competition Commissioner Margrethe Vestager herself.
- Despite the EU Commission's initial order for Apple to pay 13 billion euros in back taxes due to alleged state aid in its Irish operations, the EU court declared the additional claim null and void in 2020, noting that the Commission couldn't prove prohibited elements in Apple's tax agreements from 1991 to 2007.
- In the context of telecommunications and digital businesses, the collection of appropriate taxes, such as those pertaining to companies like Apple with substantial earnings from computer sales and internet services, is a contentious issue within the EU, with various member states advocating for fairer distribution of tax burdens.
Source: www.dpa.com
