Information released by the Court of Justice of the European Union today confirms that Apple has lodged an official appeal against the European Commission’s €13bn state aid decision.
Apple’s appeal was lodged in the names of two Irish companies, Apple Sales International and Apple Operations Europe.
The dispute involves tax rulings, granted by Ireland to Apple in 1991 and 2007 and related to the tax treatment of Irish registered non-resident companies. Although one of Apple’s Irish companies held the exclusive rights to use and license valuable Apple intellectual property in most of the world, outside of the US, under the rulings, the related income was not taxed in Ireland on the basis that the rights were held by the “head office” outside of Ireland.
The Commission determined that there was no “head office” capable of managing the intellectual property rights and therefore the income must be attributed to the Irish branch. Thus, on August 30, 2016, after a three-year investigation, Margrethe Vestager, the European Commissioner for Competition, announced that the Commission had determined that the Apple group benefited from the tax rulings, which contravened EU State aid rules.
While Apple’s grounds for appeal of the Commission decision have not yet been disclosed, an article, commissioned by Apple, appearing in The Irish Times on February 1, provides some clues.
The opinion piece, authored by Liza Lovdahl-Gormsen, argues that the State aid decision was ultimately political, that the European Commission had exceeded its powers, and that neither Apple nor Ireland could have known that the tax rulings given could be classified as State aid.
On the same day, the Irish newspapers dedicated many column inches to Commissioner Vestager’s previous day’s visit to Dublin, where she addressed a parliamentary committee and strongly defended the Commission’s decision.
It has also been made public that the tax and interest due to be recovered from Apple by end of December 2016 has not yet been paid. However, Commissioner Vestager has since said publicly that she is not concerned by this as she knows Ireland and Apple are working on the issue.
Once collected, the money will be held in an escrow account until the conclusion of the case before the Court of Justice.
Mary Cosgrove
Mary Cosgrove is a lecturer of tax and accountancy at the J.E. Cairnes School of Business and Economics, National University of Ireland, Galway and a doctoral candidate at the Irish Centre for Human Rights.
She worked as a tax adviser for over 15 years, during which time she held tax managerial roles in a variety of organisations including a “Big 4” accountancy firm and a multinational enterprise.
Mary holds an LL.M in International Human Rights Law from the Irish Centre for Human Rights in addition to bachelor degrees in Law and Commerce and is a Fellow of the Institute of Chartered Accountants in Ireland.
Latest posts by Mary Cosgrove (see all)
- Ireland’s legal arguments in Apple State aid tax case published - February 6, 2017
- Ireland: Finance Bill 2017 restricts IP capital allowance, addresses MLI - October 23, 2017
- Apple appeals State aid decision in EU court - February 2, 2017
Be the first to comment