The General Court of the European Union on December 15 rejected an application by the US government to intervene in the Apple State aid case, concluding that the US did not have a sufficient interest in the result of the case under EU law.
The Apple case, brought December 19, 2016, by the tech giant’s Irish subsidiaries — Apple Sales International and Apple Operations Europe — seeks to annul an August 30, 2016, Commission decision that concluded that Ireland granted State aid to the subsidiaries through overly generous private tax rulings issued in 1991 and 2007. The decision resulted in an additional €13 billion (USD 15.3 billion) taxes owed by the Apple subs to Ireland, which is now in the process of being collected.
The court previously granted Ireland and the EFTA Surveillance Authority’s applications to intervene in the Irish subs’ appeal to the EU courts.
The US argued that it should also be allowed to intervene because it US tax revenues would be affected and because the decision could harm bilateral tax treaty negotiations with EU Member States as well as efforts to develop transfer pricing rules within the OECD framework. The US also argued it could assist the court in understanding American tax law.
The court concluded, though, that none of these arguments were sufficient to establish under EU law that the US was directly affected by the contested decision or that it has a particular interest in the result of the case.
According to the court, the US did not prove its tax revenue would be reduced.
“[T]he alleged negative effects on [the US’s] economic situation would be dependent on many factors, the occurrence of any of which is far from certain, namely, the repatriation of the profits of the off-shore subsidiaries of the parent company of the group to which the applicants belong and the tax credit which that company might claim from the tax authorities of the United States of America,” the court observed.
The US also did not provide evidence of any direct link between the contested decision and the development OECD transfer pricing rules or EU tax treaty negotiations, the court said, The court further noted that it must resolve the present case on the basis of EU law and not the basis of US tax law.
Decisions of the General Court can be appealed to the European Court of Justice on a point of law. There is no indication at this time that an appeal has been sought.
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