The European Committee has claimed that the EU General Court “misinterprets” its August 2016 decision that Apple had been granted illegal state aid in Ireland. The European Commission hopes to overturn the General Court judgment and claw dorsum €13 billion ($fifteen.seven billion) in taxes from the US visitor.
The Full general Courtroom ruled against the Commission in July 2020 and found that Apple’s transfer pricing (TP) arrangements in Republic of ireland were not illegal land aid. Yet, the Commission filed an entreatment, dated September 25 2020 and published on the courtroom website on Feb 1 2021.
Apple and the Irish gaelic government are not backing downwards over these new claims. The Usa technology company stressed that the facts had not changed since the lower court’s decision.
“After a thorough review of the facts and the Committee’s claims, the General Court was clear in their determination that Apple has always abided by the police force in Republic of ireland, as we do everywhere we operate,” said Apple in a argument.
case is a landmark tax dispute because it concerns TP arrangements that used to be commonplace. The The states visitor used a dual construction to route its European sales through Ireland.
The Irish government said that Ireland has “always been articulate that, based on Irish law, the right amount of Irish tax was charged and that Ireland provided no state aid to Apple tree”.
“Ireland appealed the Commission decision on that basis and the judgment from the court vindicates this stance,” said an Irish gaelic government spokesperson.
The Irish government created its low tax model in the 1980s to secure foreign straight investment. Over the past 40 years, Ireland has welcomed companies such as Apple, Google and Facebook to its shores. Even so the low-revenue enhancement jurisdiction has been pressured into dismantling the double Irish structure.
Withal, the European Commission is non going to end its state assistance crackdown. The Committee wants to reform corporate revenue enhancement regimes across the EU and implement a digital tax policy. These issues will define EU financial policy for years to come.
3 points of contention
The dispute is over whether the arm’s-length principle was applied correctly and the role of the head offices in Apple’south network of subsidiaries. The Commission has laid out its reasons equally to why the General Court is incorrect in three key points:
- The General Court “misinterprets” the EC conclusion by concluding that the was state help case came down to the lack of employees and physical presence in Apple’s caput office;
- The court’s determination “violates” the separate entity approach and the ALP by “invoking functions performed by Apple tree Inc” to refuse the allocation of intellectual property (IP) to the Irish branches; and
- The court decision “violates” the dissever entity approach and the ALP by finding that the actions of company directors constitute functions performed past their head offices.
The Commission too argued that the court’south findings did not rely “solely” on the fact that the head offices of Apple tree Sales International (ASI) and Apple Operations Europe (AOE) had no employees or concrete presence. This ignores the role of those offices in the US group and particularly whether they performed functions that justified the allocation of Apple’southward intellectual belongings (IP).
“The Full general Court’s failure to properly consider the structure and content of the decision and the explanations in the Commission’southward written submissions on the functions performed by the caput offices and the Irish branches is a breach of process,” said the Commission in its filing.
Furthermore, the European Commission reiterated that the functions performed by Apple Inc are “irrelevant” to the resource allotment of profits inside ASI and AOE. The Commission argued that the court’s decision was “a alienation of procedure” on this effect.
The Commission also claimed that the General Court’s view of the functions played by ASI and AOE directors relied on “inadmissible prove”. Every bit such, the Court of Justice of the Eu (CJEU) volition accept to determine whether the General Court’s judgment was made in “error”. If the CJEU agrees with the Commission’due south arguments, Apple will pay the price.
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