Apple is once again at the center of a long-running European Union back tax battle.
The EU's highest court's advisor, Advocate General Giovanni Pitruzzella, has suggested that the lower court's ruling in favor of Apple over the 13.9 billion euros ($13 billion) tax refund matter be overturned, as per AP News. Although not legally binding, Pitruzzella's conclusion raises the possibility of a change in the current legal dispute.
The tax issue first arose in 2016, and Apple CEO Tim Cook responded sharply, calling it "total political crap." Also speaking out was former US President Donald Trump, who denounced European Commissioner Margrethe Vestager as the "tax lady" who "really hates the US." The EU accused Apple of entering into an illegal tax agreement with Irish authorities that allowed the tech giant to pay noticeably lower tax rates.
The Apple logo is seen at the entrance of an Apple store in Washington, DC, on September 14, 2021.
Tax Ruling Should Be 'Set Aside'
The EU General Court disagreed with the European Commission's allegations and ruled with Apple in a 2020 verdict. However, Advocate General Pitruzzella contends that a fresh assessment is required since the lower court disregarded several methodological flaws, which were mandated by the Commission's ruling.
Vestager suffered a hit from the 2020 loss; she has since had defeats in other tax disputes. The EU courts maintained the commission's strategy of examining business agreements with member states under state aid regulations, even in the face of setbacks. This tactic supported a larger EU push to seal tax breaks and guarantee equitable taxes for foreign businesses doing business in Europe.
Advocate General Pitruzzella suggested that the General Court's decision be "set aside" by the Court of Justice of the European Union (CJEU) and that the matter be remanded for further evaluation. The CJEU's ruling is anticipated in the next few months, and it usually follows these suggestions.
"The Advocate General is also of the view that the General Court failed to correctly assess the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings. In the Advocate General's opinion, it is therefore necessary for the General Court to carry out a new assessment," as stated in the press release of the Court of Justice of the European Union.
This tax case, officially referred to as Commission v. Ireland and Others, C-465/20 P, represents a turning point in the continuing dispute over Apple's Irish tax duties, per CNBC.
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Ireland Maintains Position on Apple Tax Issue
Ireland is standing by its position, saying that it never gave Apple any state assistance while the outstanding taxes are still being disputed. Michael McGrath underlined that the Court of Justice of the European Union's (CJEU) final ruling did not include Advocate General Giovanni Pitruzzella's most recent opinion.
"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," as reported by Reuters.
Apple and Dublin both filed appeals against the tax ruling, but in the end, the tech giant relented and sent up the whole money, which is being kept in an escrow account. Even if it keeps the money, the Irish government expects future demands from other EU members.
Apple thanked the court for its attention, referencing the General Court's decision emphasizing that no governmental help or selective advantage was given.
Vestager, who is in charge of the tax disputes, has seen a range of results from legal challenges, including victories and defeats against businesses like Stellantis, Amazon, and Starbucks. Her current research focuses on the tax policies of businesses such as Inter, IKEA, Nike, and Huhtamaki.
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