The European Court of Justice has given its final ruling in the case concerning the tax benefits that Ireland granted to Apple. The unlawful tax benefits of 13 billion euros must now be recovered from Apple.
The ruling overturns an earlier judgment by the General Court and confirms the European Commission’s 2016 decision that Ireland granted unlawful state aid to Apple. Ireland must now recover that aid.
Rulings
In 2016, the European Commission concluded that Apple had benefited from tax advantages between 1991 and 2014 thanks to two tax rulings issued by Ireland. These rulings excluded profits from intellectual property licensing made by Apple subsidiaries, such as Apple Sales International (ASI) and Apple Operations Europe (AOE), from taxation in Ireland. This gave Apple an undue advantage, which the Commission estimated amounted to around €13 billion.
However, in 2020, the General Court ruled that the Commission had not sufficiently demonstrated that these rulings conferred a selective advantage on Apple. This decision has now been overturned by the European Court of Justice. The Court states that the Commission was right to find that the profits from ASI and AOE’s activities should have been allocated to Ireland, because important decisions on these profits were taken by Apple in the United States.
Hof
The Court now emphasises that the tax treatment of ASI and AOE should not have been compared with other companies within the Apple group, such as the parent company in the US, but with other entities within the same companies. With this pronunciation Ireland must still recover the €13 billion in unlawful tax benefits from Apple, as previously demanded by the European Commission.
