The European Court may review the Apple-Ireland collusion case

The likelihood that Apple will still have to pay the European authorities €13 billion for tax evasion through Ireland has increased sharply. The Advocate General of the Court of Justice of the European Union has published a recommendation that the European Court of Justice, the highest court of the European Union, not only review the lower court decision, which was made in favor of the American corporation, but also side with the European Commission.

According to Bloomberg, Advocate General of the Court of Justice of the European Union Giovanni Pitruzzella in his advisory opinion stated that the consideration of Apple’s appeal against a fine from the European Commission in the amount of €13 billion for tax evasion with the help of the Irish authorities contained many errors, which means that the decision of the general court in favor American company from July 2020 must be reviewed by the European Court of Justice, the highest court in the EU. Moreover, according to Mr. Pitruzzella, the court should side with the European Commission and uphold the decision of the European regulator to impose penalties for Apple’s illegal activities.

The opinion of a lawyer does not impose obligations on the European Court, however, as the agency notes, in most cases the opinions of judges coincide with the opinion of advocates general.

The litigation between Apple and the EU authorities regarding the payment of taxes by an American corporation has been going on for almost ten years. In 2016, the European Commission, following its own investigation, concluded that Apple enjoyed illegal tax privileges in Ireland between 2003 and 2014. According to the European regulator, the country’s government helped the corporation significantly underestimate tax payments, which amounted to only 0.005% of its revenue in Europe. As a result, the EU authorities decidedthat the company is obliged to reimburse the EU for underpaid taxes over these years – the debt of the American corporation amounted to €13 billion.

However, soon both Apple and the Irish government filed an appeal to the decision of the European Commission. General Court of the European Union in July 2020 satisfied Apple’s appeal. The judges then came to the following conclusion: the European Commission could not prove that the Irish government provided Apple with illegal tax breaks for a decade, that there was collusion between the parties and that it was Apple’s Irish subsidiaries that brought the corporation the revenue from which, according to the European regulator, taxes had to be paid to the Irish treasury.

The European Commission had two months to decide whether it would file an appeal against the decision of the court of general jurisdiction and transfer the case to the European Court.

On the decision to appeal the case, European Commissioner for Competition Margrethe Vestager announced in September 2020. And in February 2021 there was published the text of the appeal filed by the European authorities. The conclusions of the judges of the court of general jurisdiction were considered “contradictory” by the European Commission.

Giovanni Pitruzzella, having analyzed the consideration of Apple’s appeal, came to the conclusion that the lower court made significant legal errors: “In light of the legal errors made by the Court of General Jurisdiction, which distort its assessments,” the appeal should be “completely rejected,” summed up Advocate General

Apple has already responded to Mr. Pitruzzella’s findings, saying the lower court “has made it abundantly clear: Apple received no selective advantage and no government assistance, and we believe this decision should be upheld.”

Irish Finance Minister Michael McGrath said that although the country’s lawyers will analyze the lawyer’s findings, the government’s position remains the same – the amount of tax paid by Apple was correct, and Ireland did not provide any government assistance to the American corporation.

Kirill Sarkhanyants