Apple, EU Tribunal annuls the EU Antitrust billionaire fine

The EU Court has annulled the European Commission’s decision on the fiscal ruling granted by Ireland to Apple, giving reason to the technological giant. The General Court annulled the decision in question because the Commission failed to prove legally adequately the existence of an anti-competitive advantage within the meaning of Article 107. For the Commission, which had asked Ireland to have 13 billion euro paid back by Apple for non-payment of taxes, it is a sensational defeat. since 2016, Dublin s refuses to cash the amount, defending its fiscal policy. The Irish Finance Minister, Paschal Donohoe at the helm of the Eurogroup since July 13, has learned with satisfaction the sentence and in a statement said that there has never been a special treatment for Apple, which has been taxed according to the rules in force in the Country.

Tax competition

for years that the EU Antitrust led by the Danish Margrethe Vestager has been fighting against subsidized tax regimes for multinationals adopted by countries such as Ireland, Holland and Luxembourg which create tax competition within the single market and which they subtract taxes at the state coffers. At this point, the Commission can decide on an appeal limited to the issues of law before the Court of Justice within two months and ten days of notification of the judgment. The ruling comes precisely on the day the Commission presents its offensive against tax evasion, both on the side of companies that do not pay the amount due, and on the front of States that are accused of unfair competition towards others to attract foreign companies. countries.

The story

The Commission had spoken on two tax decisions issued by the Irish Revenue Authority on January 29, 1991 and May 23, 2007 in favor of Apple Sales International (Asi) and Apple Operations Europe (Aoe), which were incorporated as an Irish company , but not Irish tax residents. The controversial tax decisions approved the methods used by Asi and Aoe to determine their taxable profits in Ireland in relation to the business activities of their respective Irish branches. The 1991 ruling remained in effect until 2007, when it was replaced by the 2007 ruling. The latter remained in effect until the new Apple corporate structure in Ireland entered into force in 2014. With its decision, the Commission had considered that the tax rulings in question constituted State aid illegally applied by Ireland declaring it incompatible with the internal market and requesting its recovery. These are 13 billion tax breaks considered illegal. Ireland and Asi-Aoe have asked the Court of the European Union to annul the Commission’s decision.

The sentence

In its judgment, the EU Court indicates that the Commission erroneously declared the existence of a selective economic advantage and, therefore, of state aid to Asi and Aoe. It approves the Commission’s assessments of normal taxation under the Irish tax legislation applicable in the case, in particular as regards instruments developed within the Organization for Economic Cooperation and Development, such as the principle of free competition, to the in order to verify whether the level of taxable profits validated by the Irish authorities corresponds to what would have been obtained under market conditions. However, the Court considers that the Commission erroneously concluded, based on its main reasoning, that the Irish authorities granted an advantage to Asi and Aoe for not awarding the Apple group’s intellectual property licenses held by AsiI to the Irish branches Aoe and, consequently, all the commercial revenues of Asi and Aoe obtained from the sales of the Apple group outside the American continent. According to the Court, the Commission should have shown that that revenue represented the value of the activities actually carried out by the Irish branches, taking into account, in particular, on the one hand, the activities and functions actually performed by the Irish branches of Asi and Aoe and, by the on the other hand, the strategic decisions taken and implemented outside these branches.

Competition and tax ruling

Although the Court regrets the incomplete and sometimes inconsistent nature of the contested tax rulings, the shortcomings identified by the Commission alone are not sufficient to prove the existence of an advantage (within the meaning of Article 107 (1) of the Treaty). The Court considers that the Commission did not demonstrate, by virtue of its alternative reasoning, that the tax rulings at issue were the consequence of the discretion exercised by the Irish tax authorities and that, consequently, a selective tax advantage had been granted.

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