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EU judges have quashed a European Commission order for Apple to pay back €14.3bn in taxes to Ireland in a landmark ruling that deals a big blow to competition commissioner Margrethe Vestager’s efforts to crack down on low-tax regimes in the bloc. The ruling hands a big legal victory to Apple and reduces the prospect of opening up other low-tax arrangements for multinationals around the EU to state aid scrutiny by Brussels.
The EU’s second-highest court on Wednesday said Brussels did not succeed in “showing to the requisite legal standard” that the tech giant had received an illegal economic advantage in Ireland over its taxes. Apple paid €13.1bn in back taxes and €1.2bn in interest after Ms Vestager’s 2016 ruling that Ireland had given Apple a “sweetheart” deal for more than 10 years.
The EU court said: “The general court considers that the commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.” The general court said it supported the EU’s right to scrutinise national tax arrangements. However, it is the second time that Brussels has failed to demonstrate that a multinational company benefited from state aid, after another multimillion-euro case against Starbucks was overturned last year. As with the Starbucks case, legal experts warned that the EU would struggle to win an appeal on the points of law, since the commission largely lost the case on not being able to meet the burden of proof. The EU court ruling represents a setback for the plans of EU competition commissioner Margrethe Vestager
Ms Vestager said in a statement that the commission would “carefully study the judgment and reflect on possible next steps”. “The commission will continue to look at aggressive tax planning measures under EU state aid rules to assess whether they result in illegal state aid,” she added. Apple said in a statement: “This case was not about how much tax we pay, but where we are required to pay it. “Changes in how a multinational company’s income tax payments are split between different countries require a global solution, and Apple encourages this work to continue.”....