The General Court of the European Union has annulled the European Commission’s 2016 decision that Ireland granted illegal state aid to Apple through selective tax breaks. The full text of the judgement is available here.
#EUGeneralCourt: images from the delivery of the judgment in the #Ireland v @EU_Commission
and @Apple v @EU_Commission
#TaxRulings cases (T-778/16 & T-892/16) #Apple #EUCommission #StateAid pic.twitter.com/mi2LJABEZD— EU Court of Justice (@EUCourtPress) July 15, 2020
Case Background
In August 2016, the European Commission adopted a decision concerning two tax rulings issued by the Irish tax authorities (Irish Revenue) on 29 January 1991 and 23 May 2007 in favour of Apple Sales International (ASI) and Apple Operations Europe (AOE), which were companies incorporated in Ireland but not tax resident in Ireland. The contested tax rulings endorsed the methods used by ASI and AOE to determine their chargeable profits in Ireland, relating to the trading activity of their respective Irish branches. The 1991 tax ruling remained in force until 2007, when it was replaced by the 2007 tax ruling. The 2007 tax ruling then remained in force until Apple’s new business structure was implemented in Ireland in 2014.
By its decision, the Commission considered that the tax rulings in question constituted state aid unlawfully put into effect by Ireland. The aid was declared incompatible with the internal market. The Commission demanded the recovery of the aid in question. According to the Commission’s calculations, Ireland had granted Apple 13 billion euro in unlawful tax advantages.
Ireland and ASI and AOE claimed that the General Court should annul the Commission’s decision.
The Commission’s response
EU Executive Vice-President Margrethe Vestager said the Commission would carefully study the judgment and reflect on possible next steps. She also said the Commission stood fully behind the objective that all companies should pay their fair share of tax.
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