Apple has suffered a setback in its fight against the EU’s $14 billion tax order

The Apple logo is displayed at the Apple Store at a shopping mall in La Jolla, California, United States, on December 17, 2019. REUTERS/Mike Blake/File Photo Get license rights

LUXEMBOURG, Nov 9 (Reuters) – An EU court made legal errors when it ruled in favor of Apple over a 13 billion euro ($14 billion) tax order and should re-examine the case, an adviser to Europe’s top court said on Thursday. , in a possible setback for the iPhone maker.

The tax case against Apple is part of EU antitrust chief Margrethe Vestager’s crackdown on deals between multinational companies and EU countries.

The European Commission concluded in its 2016 report that Apple benefited from two Irish tax rulings spanning more than two decades, artificially reducing its tax burden to 0.005% in 2014.

In 2020 the European Union’s General Court upheld Apple’s challenge, saying regulators did not meet the legal standard to show Apple enjoyed an unfair advantage.

But Giovanni Pitruzzella, Advocate General of the Court of Justice of the EU (CJEU), disagreed, saying the CJEU judges should set aside the General Court ruling and send the case back to a lower court.

“The General Court’s decision on ‘tax rulings’ adopted by Ireland in respect of Apple should be overturned,” he said in a non-binding opinion.

He said the General Court had made a series of errors of law and had failed to “correctly assess the meaning and consequences of certain methodological errors which, in accordance with the Commission’s decision, violate the tax rulings”.

“Therefore, it is necessary for the General Court to make a fresh assessment,” Pitrusella said.

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The CJEU, which will rule in the coming months, is adopting four of the five such recommendations.

Ireland reiterated that it did not provide any state aid to Apple.

“It is important to bear in mind that this opinion is not part of the Court of Justice of the European Union decision, but will be considered by the Court when it comes to its final decision,” Michael McGrath said in a statement.

“Ireland’s position has always been that the correct Irish tax was paid and that Ireland did not provide any state aid to Apple.”

Although Apple and Dublin appealed the tax order, Apple had to hand over the full amount, which Ireland held in an escrow account.

While the Irish government has long lost its appeal and kept the money, other EU member states say they owe them some taxes.

“We thank the Court for its time and continued consideration of this case. The General Court’s ruling was clear that Apple received no selective advantage and no state aid, and we believe it should be upheld,” an Apple spokesperson said.

Vestager has had a mixed record defending his tax cases in court, with judges upholding challenges from auto maker Stellandis ( STLAM.MI ), Amazon ( AMZN.O ) and Starbucks ( SBUX.O ).

His biggest legal victory to date came in September when the General Court upheld his decision against a €700m Belgian tax scheme for 55 multinationals. His tax crackdown has forced EU countries to scrap such sweetheart deals.

Vestager is currently investigating IKEA brand owner Inter IKEA’s Dutch tax arrangement in 2017, Nike’s ( NKE.N ) Dutch tax rulings and Finnish food and beverage packaging company Huhtamaki’s ( HUH1V.HE ) tax rulings in Luxembourg.

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Apple Case C-465/20 P Commission v Ireland and others.

($1 = 0.9346 euros)

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An agenda-setting and market-moving journalist, Fu Yun Che has 20 years of experience at Reuters. His stories of high-profile mergers lifted the European telecoms index, sending companies’ shares soaring and helping investors decide their move. His knowledge and experience of European antitrust laws and developments has helped break stories on Microsoft, Google, Amazon, numerous market-moving mergers and antitrust investigations. He has previously reported on Greek politics and institutions, where Greece’s entry into the Eurozone punched above its weight on the international stage, as well as Dutch corporate giants and the idiosyncrasies of Dutch society and culture never fail to captivate readers.

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