Global Daily Tax News, Ireland Responds To ECJ AG Opinion In Apple Tax Ruling Case, (Nov 14, 2023)

Ireland's Finance Minister has issued a statement on the recently released opinion of European Court of Justice Advocate General Giovanni Pitruzzella in the ongoing dispute between the European Commission and Ireland on the country's tax rulings for Apple.

The Advocate General has issued an opinion recommending that the European Court of Justice return the case to the General Court.

Earlier, following an in-depth state aid investigation launched in June 2014, the European Commission concluded that the tax rulings (issued in 1991 and in 2007) "substantially and artificially lowered the tax paid by Apple in Ireland since 1991." Apple was required to pay EUR13bn (USD14.8bn) in back taxes into an escrow account set up by the Irish Government, along with interest of EUR1.2bn, pending the outcome of the Government and Apple's appeal.

The European Commission had argued that Ireland's endorsement of Apple's Irish tax arrangements had enabled Apple to pay less tax than competing companies would be able to pay – that it had granted it a "selective tax advantage".

However, in July 2020, the EU's General Court decided, for Ireland (Case T-778/16) and Apple's Irish branches (Case T-892/16), that the European Commission had not succeeded in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU. It consequently decided to annul the Commission's contested decision.

However, on November 9, 2023, Advocate General Pitruzzella proposed that the Court set aside the judgment and refer the case back to the General Court for a new decision on the merits.

According to the Advocate General, the General Court committed a series of errors in law when it ruled that the Commission had not shown to the requisite legal standard that the intellectual property licences held by ASI and AOE and related profits, generated by the sales of Apple products outside the USA, had to be attributed for tax purposes to the Irish branches.

The Advocate General also considers that the General Court failed to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings. In the Advocate General's opinion, it is therefore necessary for the General Court to carry out a new assessment.

Irish Finance Minister Michael McGrath said: "I note the Opinion of the Advocate General. It is important to bear in mind that this Opinion does not form part of the Court of Justice of the European Union judgment but is considered by the Court when arriving at its final ruling."

"My department and the State's legal team will consider the full Opinion of the Advocate General in detail."

"It has always been, and remains, Ireland's position that that the correct amount of Irish tax was paid and that Ireland provided no State aid to Apple. We now await the judgment of the Court of Justice of the European Union on this matter."