Brussels has found an ally in the EU’s attorney general for its battle against the multi-million dollar tax benefits that Apple obtained from Ireland. Lawyer Giovanni Pitrucella rejects the ruling of the General Court of the EU that struck down Brussels’ claim to Apple for 14.3 billion euros in unpaid taxes in Ireland between 2007 and 2014 thanks to the tax benefits that that country offered the American multinational and that the European Commission considers that they are illegal state aid. That ruling is being appealed before the highest community court, the CJEU, and in its previous report Pitrucella asks it to annul it and retry it from the beginning.
“The General Court committed a series of errors of law by finding that the Commission had not sufficiently demonstrated that the intellectual property licenses of Apple Sales International and Apple Operations Europe [dos filiales del gigante tecnológico] and the corresponding profits, generated by sales of Apple products outside the United States, had to be attributed for tax purposes to the Irish branches,” explains the statement issued by the European courts this Thursday. This statement leads Advocate General Pitrucella to conclude that “it is necessary for the General Court to proceed to a new assessment of the matter.
The conclusions of the lawyer general, which most of the time coincide with what the CJEU finally decides, revive the hopes of the Community Executive of winning in the most emblematic case and with the largest economic amount of those it has open in its battle against the regimes. advantageous taxes for companies that create capitals like Dublin.
It has been nine years since the powerful Competition Department of the European Commission started this fight by concluding that the tax regime that Ireland applied to Apple was state aid. It then opened an investigation that concluded in 2016 declaring that between 1991 and 2014 the American technology giant had benefited from a tax situation that distorted competition and demanded that Ireland demand the company pay 14.3 billion untaxed between 2007 and 2014. .
Both the company and Ireland, a country with similar tax agreements with other large technology companies, rejected this decision and appealed it to the courts based in Luxembourg. In the first instance, the judges’ decision smiled upon them. The EU General Court ruled that the European Commission had not demonstrated that Ireland gave a competitive advantage to the North American giant through tax pacts. Now, however, it is the attorney general who believes that these judges are wrong and have to re-judge the matter.
The case of Apple and Ireland is the largest of those that Brussels has opened against the tax regimes that several EU countries grant to large companies to set up shop in their territory. In fact, Brussels’ decision in 2016 caused the United States Treasury to accuse the Community Executive of being a “supranational tax authority.” In addition to the British island, others such as the Netherlands, Luxembourg or Belgium have open disputes for similar situations, although with different mechanisms.
One of the problems facing the internal market in the EU is the lack of tax harmonization between different countries. This allows different tax treatments for companies in the Member States and even downward tax competition between countries to attract multinational headquarters and, by extension, the benefits that entails: employment, tax collection or driving effects on the economy (research , training…).
To avoid this race between countries and maintain the fair play –and at the same time achieve a certain tax harmonization through an indirect means – Brussels began a battle years ago against this type of tax regimes. So far, the fight between the Community Executive has resulted in more defeats than victories: one of them was, for example, the treatment that Luxembourg gave to Fiat (now part of the Stellantis automobile group). In November, the CJEU ruled in favor of the company and the Grand Duchy and annulled the Commission’s claim that €30 million in unpaid taxes be recovered. The same fate befell, this time in the General Court, a claim against Starbucks and the Netherlands, although this decision is not final.
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