European justice decides on Wednesday the decision of the European Commission, taken in 2016, to order the American giant to reimburse Ireland billions of tax benefits.
Image d’illustration.
AFP
New episode of the fight between Brussels and the American digital giants: European judges are ruling on the EU decision on Wednesday to order Apple to reimburse Ireland for 13 billion improper tax advantages.
This long-awaited judgment comes the day before another decision in an equally sensitive file, this time concerning Facebook and the transfer of personal data from Europe to the rest of the world.
In the case of Apple, the case dates back to August 30, 2016: the European Commissioner for Competition, Margrethe Vestager, now Vice-President of the European Commission, decides to strike a blow against the apple brand.
Illegal “state aid”
According to the Commission’s investigation, Apple repatriated to Ireland between 2003 and 2014 all of the revenues earned in Europe (as well as in Africa, the Middle East and India) because the company was receiving treatment there. favorable tax, thanks to an agreement with the Dublin authorities. The group thus escaped almost all of the taxes it should have paid over this period, about 13 billion euros (13.94 billion francs), according to calculations by the Commission.
An advantage that constitutes illegal “state aid” for Brussels, since it comes at the expense of other companies subject to less favorable conditions. For Dublin, however, there was nothing illegal. Known for its “pro business” positions, Ireland has attracted many multinationals, job providers, to the island, thanks to advantageous taxation. It is for this reason that Ireland, like Apple, has appealed the decision.
“The Commission has overstepped its powers and violated Irish sovereignty” over corporate tax, Dublin said. As for Apple’s boss, Tim Cook, he called the affair “political rubbish”.
Call possible
Whatever the decision on Wednesday, the judgment is subject to appeal. “I think it will be an intermediate step, certainly important, but certainly not the end of the story,” said Alfonso Lamadrid, a lawyer specializing in competition matters at Garrigues in Brussels, in an interview with AFP. Generally, when the cases are appealed to the Court, the final decision comes about 16 months later. So in the case of Apple, in the year 2021.
For the Danish Margrethe Vestager, black beast of the Gafa and nicknamed the “tax lady” by the American president Donald Trump – precisely because of the Apple case – this decision will constitute a new test of his policy led against a series of multinationals having benefited a tax treatment deemed too favorable.
In two similar cases, European judges had given a first glimpse of their analysis in September 2019. They had refuted the arguments of the European Commission concerning the American chain of coffee Starbucks, ordered to reimburse up to 30 million euros in back taxes in the Netherlands. On the other hand, in the case of Fiat, they had given reason to Brussels, which required of the Italian group the payment in Luxembourg of an identical sum for improper tax advantages.
Specific context
“In the Apple case, the question will be whether the Commission has managed to demonstrate that the American group really benefited from a competitive advantage and how to quantify this advantage (therefore the amount of the sum to be reimbursed, editor’s note)”, said Alfonso Lamadrid.
This affair arises in a very particular context, where several European countries, including France, want to achieve better taxation of the digital giants, wherever they make profits. However, in an EU of 27, where all tax issues are decided unanimously, it is not easy to get along.
“Besides Ireland, the Netherlands, Cyprus, Malta and Luxembourg also have tax policies favorable to multinationals,” observes Tove Ryding of the international NGO Eurodad. “Having a tax system full of loopholes and then closing them using the state aid rules is not at all effective,” added the expert.
(AFP/NXP)
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