The chief legal expert at the European Court of Justice (ECJ) has proposed a new verdict in the 13-billion-euro tax dispute between Apple and the European Commission.
The spat began in 2016, when the EU accused Ireland of helping Apple in tax evasion. According to the Commission, Ireland granted Apple two erroneous tax decisions, allowing the company to pay a 0.005% effective tax rate on its revenues in Ireland.
The Commission’s decision was overturned by the EU’s lower General Court in 2020, which decided that the Commission had failed to meet the legal requirement for demonstrating that Apple had benefited unfairly.Advocate General Giovanni Pitruzzella, the ECJ’s chief legal advisor, asked the court on Thursday to overrule the General Court’s judgement and issue a fresh verdict.
Pitruzzella claimed that the General Court erred in its appraisal of the matter. He argued, for example, that the General Court missed the fact that Apple’s two tax judgements were extremely unusual, allowing Apple to pay significantly less tax than other companies in Ireland.
According to Pitruzzella, the General Court overlooked Apple’s “sweetheart deal” with the Irish government.
If the ECJ agrees with Pitruzzella, Apple may be forced to reimburse the Commission for the 13 billion euros in back taxes collected in 2016.
Consequences of the Advocate General’s Opinion
The opinion of the Advocate General is not binding on the ECJ, although it is normally quite significant. If the ECJ follows Pitruzzella’s recommendation, the Commission will have won a huge victory and will send a strong message to other multinational corporations that they cannot dodge taxes by using loopholes in national tax rules.
Reaction from Apple and Ireland
Apple has stated that it is “confident” that the case will be won on appeal. The corporation has claimed that it did not violate any tax rules and that it pays all of its taxes.
The Irish government has also stated that it believes the ECJ will sustain the General Court’s decision. The government has said that Ireland’s tax regulations are fair and are not intended to benefit multinational corporations.
Next steps in the case
The ECJ is now expected to hear the case on appeal. It is not clear when the ECJ will issue its ruling, but it could be several months or even years before the case is finally resolved.
Potential impact on other multinational companies
The outcome of the Apple tax case could have a significant impact on other multinational companies that operate in Europe. If the ECJ rules against Apple, it could set a precedent that could lead to other multinational companies being forced to repay back taxes.
Conclusion
The opinion of the Advocate General in the Apple tax matter represents a significant development. If the ECJ follows Pitruzzella’s recommendation, the Commission will have won a huge victory and will send a strong message to other multinational corporations that they cannot dodge taxes by using loopholes in national tax rules.
The Apple tax case is one of several that the Commission is pursuing against multinational corporations over allegations of tax evasion. The Commission is also looking into other businesses, including Amazon, Google, and Facebook.
The outcome of these cases has the potential to have a substantial impact on how multinational corporations pay taxes in Europe. If the Commission is successful in its lawsuits, European governments might gain billions of euros in new tax revenue. Other countries, including the United States, are keeping a close eye on the Apple tax dispute. The case’s conclusion could have ramifications for how countries throughout the world tax multinational corporations.
