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European Commission to appeal €14.3 billion Apple and Ireland tax ruling

The legal row stems from an EU investigation into Apple’s Irish tax structures.

Image: SIPA USA/PA Images

THE EUROPEAN COMMISSION will appeal the €14.3 billion Apple tax judgment to the highest court in the European Union.

EU Competition Commissioner Margrethe Vestager confirmed the decision in a statement this morning.

In July, the General Court of the European Union ruled in Apple and Ireland’s favour in their legal challenge against the Commission’s order for the iPhone maker to hand back €14.3 billion in allegedly unpaid taxes to the Irish government.

This morning, Vestager said that the July judgment “raises important legal questions” about state aid.

“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,” Vestager said.

The legal row stems from a Commission probe into Apple’s Irish tax structures.

On foot of that investigation, it found that two tax rulings delivered by the Revenue in 1991 and 2007 allowed the company to funnel profits through Irish-anchored structures without paying tax in any jurisdiction.

The Commission argued that the rulings had breached EU state aid rules designed to prevent individual companies from receiving favourable treatment from member state governments.

European Commissioner for Competition Margrethe Vestager said at the time, “Ireland had granted illegal tax benefits to Apple”.

But Apple and the Irish government appealed those findings to the General Court of the European Union, which found in their favour in mid-July.

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In its July judgement, the General Court annulled the Commission’s findings because its investigation “did not succeed in showing to the requisite legal standard that there was an advantage” given to two Irish-anchored Apple companies.

It also ruled that the “Commission incorrectly concluded, in its primary line of reasoning, that the Irish tax authorities had granted” the two Apple entities an unfair advantage.

Experts believe that the latest appeal could drag the matter out for another 18 months or two years.

Commenting on the latest developments, the Minister for Finance Paschal Donohoe said, “I note the decision of the European Commission to lodge an appeal.

“Ireland has not yet been served with formal notice of the appeal. When it is received, the government will need to take some time to consider, in detail, the legal grounds set out in the appeal and to consult with the government’s legal advisors, in responding to this appeal.”

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