Today the European Commission announced that it plans to appeal the July 2020 ruling that overturned the original $15 billion fine that it leveled against Apple and Ireland over State Aid and taxes, as it believes the General Court “made a number of errors of law” when it decided to overturn the original August 2016 ruling.
In a statement, Margrethe Vestager, the competition commissioner, noted that the Commission is making the move because it believes that offering tax breaks to one company and not its rivals “harms fair competition in the European Union in breach of State aid rules.”
The case, if it proceeds, will be heard in the European Court Of Justice, Europe’s equivalent of the Supreme Court.
The full statement is below.
Apple has already responded with its own statement, saying it will review the appeal but also that it (unsurprisingly) sees the July 2020 decision as final.
The announcement means that a tax saga, concerning one of the world’s most profitable and biggest companies, which has been years in the making, is set to continue.
It comes at a time when global economies are contracting due to the coronavirus pandemic, which has hit European countries especially hard, and countries and the EU have been scrambling to provide public assistance to individuals and businesses who have been put out of work through furlough schemes and other efforts. In that context, collecting tax revenues and ensuring fair competition take on particularly acute profiles.
The original ruling that struck down the State Aid case was seen as a major blow to Europe’s efforts to recoup taxes from large multinationals that have built highly profitable operations in the region under big tax breaks.
In that ruling, the court determined that “the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU [Treaty of the Functioning of the European Union].” Apple’s basic contention has always been that the offices in Europe are not where the profits are really made and this is why it shouldn’t have to pay taxes on those earnings there.
— EU Court of Justice (@EUCourtPress) July 15, 2020
Apple had started to amass the funding needed to pay the fine in an escrow account after the original ruling in 2016 but hadn’t commenced in doing so.
We have contacted Apple for its response and will update this post as we learn more.