Legal Adviser Recommends Review of Apple’s €13bn Tax Ruling

A legal adviser to the European Court of Justice has recommended a review of the 2016 ruling that allowed Apple to avoid paying €13 billion in back taxes. Advocate General Giovanni Pitruzzella argued that the decision, which found Apple had received illegal tax breaks from the Irish government, should be reconsidered due to a series of legal errors. While the adviser’s opinion is non-binding, the court generally aligns with such recommendations in most cases.

The European Commission initially ruled in 2016 that Apple had benefited from unfair preferential treatment by the Irish government, allowing the tech giant to pay a significantly lower tax rate than other companies. The Commission considered this preferential treatment as illegal state aid granted to Apple.

The case has been a protracted legal battle involving the EU, Apple, and the Irish government. In 2019, the General Court overturned the Commission’s ruling, asserting that the decision was legally flawed. However, Advocate General Pitruzzella’s recent recommendation suggests a need for a fresh review, contending that the previous ruling failed to evaluate certain methodological errors that impacted the tax rulings.

Apple, in response, maintained its position that it received no selective advantage or state aid, emphasising the clarity of the initial ruling in its favor.

The ongoing dispute symbolises the EU’s efforts to combat what it perceives as significant tax avoidance by multinational corporations. The Irish government, defending its position, argued that Apple should not repay the back taxes, asserting that the benefits of attracting large companies to Ireland outweigh the potential loss in tax revenue.

While Ireland hosts Apple’s European, Middle Eastern, and African operations due to its low corporate tax rates, the EU contends that Ireland’s application of extremely low tax rates to Apple constitutes an unfair subsidy. The latest legal opinion raises the prospect of a renewed review of the case, potentially altering the trajectory of this longstanding tax dispute.