Apple faces a setback in challenging the EU’s $14 billion tax order

• Apple allegedly obtained unfair state aid from Ireland, resulting in a 0.005% tax rate in 2014.
• Ireland reiterated that it provided no state aid to Apple, maintaining that the correct amount of tax was paid.
• Despite challenges, Apple had to transfer the complete sum held in escrow by Ireland.

The tax lawsuit involving Apple was a component of European Union antitrust chief Margrethe Vestager’s efforts to curtail agreements between multinationals and EU nations perceived as providing unfair state aid.

In its 2016 decision, the European Commission stated that Apple had gained advantages from two Irish tax rulings spanning over two decades, artificially diminishing its tax liability to as low as 0.005% in 2014.

“The judgment of the General Court on ‘tax rulings’ adopted by Ireland in relation to Apple should be set aside,” he said in a non-binding opinion.

He said the General Court committed a series of errors in law and had also failed “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings”.

“It is therefore necessary for the General Court to carry out a new assessment,” Pitruzzella said.

The CJEU, expected to make a decision in the coming months, typically follows approximately four out of five recommendations of this nature.

Ireland restated that it had not offered any state aid to Apple. “It is important to bear in mind that this opinion does not form part of the Court of Justice of the European Union judgment but is considered by the Court when arriving at its final ruling,” Michael McGrath said in a statement.

“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.”

Despite Apple and Dublin challenging the tax order, Apple was still required to transfer the complete sum, held in an escrow account by Ireland.

Vestager has encountered varying outcomes in defending her tax cases in court, as judges have supported challenges from automaker Stellantis, Amazon, and Starbucks.

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Her most significant legal triumph thus far occurred in September, when the General Court affirmed her decision against a 700 million-euro Belgian tax scheme involving 55 multinationals. Her efforts in tax enforcement have compelled EU countries to abandon such preferential agreements.