It won’t be over until it is over for Apple and its ongoing tax problems in Europe. The European Commission announced today that it will appeal the July 2020 ruling that overturned the original $ 15 billion fine it imposed on Apple and Ireland for state aid and taxes for overcoming it believes the court has “committed a number of errors of law” and decided to set aside the original August 2016 judgment.
In other words, it appeals to the calling.
In a statement, Margrethe Vestager, the Commissioner for Competition, stated that the Commission is taking the step because she believes that offering tax breaks to a company and not to its competitors “is in breach of fair competition in the European Union State aid rules affected ”.
The full explanation can be found below.
Apple has already responded with its own statement that it will examine the objection, but also that it (unsurprisingly) regards the July 2020 decision as final.
“The court categorically annulled the Commission̵
The announcement means that a tax saga about one of the world’s most profitable and largest companies that has been in the making for years is set to continue.
There comes a time when the global economy is shrinking due to the coronavirus pandemic, which has hit European countries particularly hard, and countries and the EU are looking to provide public support to individuals and businesses who have been made unemployed through vacation programs grant and other efforts. In this context, the collection of tax revenues and the guarantee of fair competition take on a particularly acute profile.
The original decision to put down the state aid case was seen as a heavy blow to Europe’s efforts to recover taxes from large multinationals that have built highly profitable businesses in the region with huge tax breaks.
In that decision, the General Court found that “the Commission has failed to demonstrate, to the required legal standard, that there is an advantage within the meaning of Article 107 (1) TFEU [Treaty of the Functioning of the European Union]. “Apple’s basic claim has always been that the offices in Europe don’t really make the profits, and therefore they shouldn’t have to pay taxes on those revenues.
Apple had begun amassing the funds required to pay the fine in an escrow account following the original decision in 2016, but had not yet begun.
We asked Apple for a response and will update this post as we learn more.
There’s more to come. Update for updates. Memo below.
“The Commission has decided to appeal to the European Court of Justice against the July 2020 judgment of the General Court in Ireland on Apple’s state aid case, which overturned the Commission’s August 2016 decision that Ireland was illegally giving Apple through selective tax breaks Has granted aid.
The judgment of the General Court raises important legal questions that are relevant to the Commission in applying the State aid rules to tax planning cases. The Commission also takes the view that the General Court erred in law in a number of ways. This is why the Commission is bringing this matter to the European Court of Justice.
It remains a top priority for the Commission to ensure that all businesses, large and small, pay their fair share of taxes. The General Court has repeatedly upheld the principle that while Member States are competent to set their tax laws, they must do so in relation to EU law, including state aid rules. If Member States grant tax advantages to certain multinational companies that are not available to their competitors, this affects fair competition in the European Union in violation of state aid rules.
We must continue to use all the tools at our disposal to ensure that companies pay their fair share of taxes. Failure to do so will deprive the public and citizens of much of the investment that is needed to support Europe’s economic recovery. We must continue our efforts to get the right legislation in place to fill the gaps and ensure transparency. So there is more work ahead of us – including to ensure that all businesses, including digital ones, pay their fair share of taxes where they are rightly due. “