The European Union’s top court on Tuesday rejected Apple’s final legal challenge against an order from the bloc’s executive commission to repay 13 billion euros in back taxes to Ireland, bringing an end to the long-running dispute.
The European Court of Justice overruled a lower court’s earlier decision in the case, saying it “confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover.”
The case drew outrage from Apple when it was opened in 2016, with CEO Tim Cook calling it “total political crap.” Then-U.S. President Donald Trump slammed European Commissioner Margrethe Vestager, who spearheaded the campaign to root out special tax deals and crack down on big U.S. tech companies, as the “tax lady” who “really hates the U.S.”
In its 2020 ruling, the European Union’s General Court disagreed with the European Commission, the bloc’s executive branch, which had accused Apple of striking an illegal tax deal with Irish authorities so that it could pay extremely low rates.
A key adviser to the European Court of Justice (ECJ) recommended last November that it set aside a 2020 EU general court ruling that the European Commission had failed to stand up a claim the iPhone maker owed the Republic more than €13 billion in back taxes, plus interest.
The ECJ typically rules on cases between three and six months after such an adviser, known as an advocate general, issues an opinion.
While there had been an expectation in Dublin that the ECJ decision would be issued in June, sources said on June 13th that it would not be made until after the court’s summer recess, which spanned from mid-July to the end of August.
In his opinion in November, advocate general Giovanni Pitruzzella said the general court, the lower court, committed a series of errors of law and failed to assess “certain methodological errors” relating to Apple’s Irish tax liabilities.
He recommended the ECJ set aside the general court’s judgment and that it be sent back down to the lower court for a new ruling on the case’s merits.
The views of advocates general are typically followed by the court.
EU competition commissioner Margrethe Vestager ordered Apple in 2016 to pay the State more than €13 billion in alleged back taxes, covering 2004-2014, as she claimed the Republic had given the US tech giant illegal tax aid.
The decision centered on two tax opinions, or “rulings” as they are referred to, handed out by Revenue in 1991 and 2007 to Apple subsidiaries in Ireland.
The commission said the rulings gave Apple an unfair and select advantage over other corporate taxpayers.
A legal appeal by Ireland and Apple against the commission’s decision resulted in a ruling by the EU general court in 2020 that Ms Vestager’s officials fell short of showing to “the requisite legal standard” that Apple had received illegal State aid.
