2023-11-09 16:05:23
Published on Nov. 9, 2023 at 11:06 a.m. Updated on Nov. 9, 2023 at 5:05 p.m.
New twist in the 13 billion euro tax fight between Apple and Brussels. On Thursday, Giovanni Pitruzzella, the Advocate General of the Court of Justice of the EU (CJEU), delivered an unfavorable opinion to the Cupertino group in this judicial soap opera which has lasted since 2016.
On that date, the European Commission ordered Apple to repay 13 billion euros to Ireland, estimating that the Apple firm had benefited from illegal tax aid. A decision that the EU General Court then “overturned”, with great fanfare, in 2020.
However, a twist on Thursday: the CJEU lawyer considers, in his conclusions, that the EU General Court “committed several legal errors” in 2020. Therefore, he suggests that its judgment be annulled and that this last rejudges the case on the merits…
A highly anticipated final verdict
A turnaround that will bring a smile to the face of Margrethe Vestager, vice-president of the European Commission, responsible for competition – currently on unpaid leave due to her candidacy for the European Investment Bank.
The Dane has been engaged for years in a merciless fight against the tax advantages granted by EU countries to multinationals. If she has had to suffer several disappointments in this area – in matters not all definitive -, this time she can rub her hands.
Granted, at this stage it is only a non-binding opinion – so it’s not the end of the story. The Court must now deliver its final judgment within six months. But since the Court generally – but not systematically – follows the conclusions of the Advocate General, this gives a first idea of this highly anticipated final verdict.
Legal errors
“The Court’s decision was very clear that Apple did not receive any selective advantage or any state aid, and we believe that this should be confirmed,” the American giant immediately reacted.
Apple recalls that between 2003 and 2014 – the dates of the Commission’s investigation – it paid $577 million in taxes to the Irish tax authorities, or 12.5% of profits generated in the country, as required by law. Irish tax law.
The fact is that Apple products are created in the United States. During a hearing, the Apple firm clarified that it therefore paid 20 billion euros in taxes in the United States on these profits. But according to the Commission, these should have been imposed in Ireland.
Systemic effects
Emblematic in terms of the amounts involved, but also the repercussions it could have, the Apple case is the most crucial in Margrethe Vestager’s arduous and unprecedented fight for tax fairness. Other companies have also been targeted for similar reasons, including Engie, Fiat, Starbucks and Amazon.
“These are just conclusions but they are important. This case is in fact, by its magnitude, carrying systemic effects; he is partly at the origin of the American tax reform to tax the income that American giants generate outside the United States,” points out Benoît Le Bret, lawyer at Gide Loyrette Nouel. There is no doubt that the future judgment of the CJEU will once again cause a lot of ink to be spilled.
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