The EC made the tax demand to Apple in 2016, accusing it of benefitting from illegal state aid from Ireland. However, Apple appealed the decision and, in a July hearing, had its objections upheld. Now the EC is asking another court to overturn that verdict.
The July hearing by Europe’s General Court stated that, while member states can determine their own laws about taxation, they have to do so in a way that respects EU law. One of these EU laws rules against illegal state aid. But the General Court concluded that the European Commission had not established sufficient evidence that the tax treatment afforded to Apple by Ireland gave it a significant advantage.
The European Commission fights back
The Commission disagrees with this perspective. It is therefore appealing the decision to the European Court of Justice. It will ask it to overrule the General Court’s judgment.
In a statement, competition commissioner Margrethe Vestager said that:
“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.”
Apple has always insisted that it pays every cent of tax that it owes. During a 2015 episode of 60 Minutes, Apple CEO Tim Cook labeled reports that Apple doesn’t pay its taxes “total political crap.” Apple’s Chief Financial Officer Luca Maestri has said that “if there is a fair outcome of the [European Commission] investigation, [Apple should pay] zero” extra tax.