Apple encounters a potential setback over a 13-billion-euro tax order

Apple has faced a potential setback as an adviser to the European Union’s highest court argued that an EU tribunal erred in its ruling that favored Apple in a 13-billion-euro ($14 billion) tax order, according to Reuters on Thursday.

Part of EU antitrust chief Margrethe Vestager’s aggressive campaign against perceived unfair state aid, the tax case revolves around Apple’s alleged benefit from two decades of Irish tax rulings, artificially reducing its tax obligations. According to the European Commission’s 2016 decision, Apple’s tax burden dropped to as low as 0.005 percent in 2014.

Advocate General Giovanni Pitruzzella at the EU Court of Justice (CJEU) challenges the General Court’s 2020 decision that upheld Apple’s appeal. Pitruzzella argues that the General Court made legal errors and failed “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings.”

Suggesting a reconsideration, he proposes setting aside the General Court ruling and referring the case for a fresh evaluation. The CJEU is expected to make a final ruling in the coming months, following the usual practice of adopting about four in five such recommendations.

Despite both Apple and Dublin appealing the tax order, Apple had to transfer the entire amount to an escrow account in Ireland. The Irish government maintains that it provided no state aid to Apple, with Irish official Michael McGrath emphasizing that Pitruzzella’s opinion doesn’t form part of the CJEU judgment but is considered in the final ruling.

In response to recent developments, an Apple spokesperson expressed gratitude to the court, emphasizing the General Court’s previous ruling that Apple received “no selective advantage and no state aid.”

Margrethe Vestager, known for the tax crackdown, has had a mixed record in court, securing victories against companies like Stellantis while facing setbacks in cases involving Amazon and Starbucks. Vestager is currently investigating the tax arrangements of Inter IKEA, Nike, and Huhtamaki.