UK and International Tax news

EC To Appeal In Apple State Aid Case

Monday 28th September 2020

The European Commission has decided to appeal the General Court’s judgment on the Apple State aid case in Ireland

In July 2020 the General Court of the EU annulled the decision taken by the EC regarding the Irish tax rulings in favour of Apple. This followed appeals by both Apple and Ireland against the EC’s finding in 2016 that there was selective tax treatment of Apple in Ireland which was illegal under EU state aid rules because it gave Apple a significant advantage over other businesses that were subject to the same national taxation rules.

The EC’s decision required the recovery of illegal state aid for a ten-year period preceding its first request for information in 2013 and instructed the recovery of unpaid taxes in Ireland from Apple for the years 2003 to 2014 of up to €13 billion, plus interest.

In a statement by the Executive Vice President Margrethe Vestager, she confirmed that “The Commission has decided to appeal before the European Court of Justice the General Court’s judgment of July 2020 on the Apple State aid case in Ireland, which annulled the Commission’s decision of August 2016 finding that Ireland granted illegal State aid to Apple through selective tax breaks.

The General Court judgment raises important legal issues that are of relevance to the Commission in its application of State aid rules to tax planning cases. The Commission also respectfully considers that in its judgment the General Court has made a number of errors of law. For this reason, the Commission is bringing this matter before the European Court of Justice.

Making sure that all companies, big and small, pay their fair share of tax remains a top priority for the Commission. The General Court has repeatedly confirmed the principle that, while Member States have competence in determining their taxation laws taxation, they must do so in respect of EU law, including State aid rules. If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the European Union in breach of State aid rules.

We have to continue to use all tools at our disposal to ensure companies pay their fair share of tax. Otherwise, the public purse and citizens are deprived of funds for much needed investments – the need for which is even more acute now to support Europe’s economic recovery. We need to continue our efforts to put in place the right legislation to address loopholes and ensure transparency. So, there’s more work ahead – including to make sure that all businesses, including digital ones, pay their fair share of tax where it is rightfully due.”

If you would like further details on this case, please contact Keith Rushen on 0207 486 2378.

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