Cork Campus Ireland Team Members Working On Two FloorsSource: Apple

What you need to know

  • The European Commission lodged an appeal against an Apple state aid ruling in Ireland last year.
  • Details of the appeal have now been published.
  • The EC claims judges made several errors and applied contradictory reasoning in making their judgment.

An appeal published this week by the EU reveals that the European Commission believes judges made several errors and applied contradictory reasoning when ruling that Apple's tax arrangements in Ireland were tantamount to state aid.

The EC appealed a 2020 ruling in September of last year, EC Executive Vice-President Margrethe Vestager stating "The Commission has decided to appeal before the European Court of Justice the General Court's judgment of July 2020 on the Apple State aid case in Ireland, which annulled the Commission's decision of August 2016 finding that Ireland granted illegal State aid to Apple through selective tax breaks."

The appeal, now published to the EU's EUR-Lex website reveals the full merits of the EC's case. The Commission states that the General Court made "several errors of law". Firstly, it claims it misinterpreted the original tax decision against Apple by concluding "that the primary finding of advantage relied solely on the lack of employees and physical presence in the head offices" of Apple. Secondly that the court's decision "violates the separate entity approach and the arm's length principle" by "invoking functions of performed by Apple Inc. to reject the Decision's allocation of the Apple IP licenses to the Irish branches". And thirdly, that the court violates the separate entity approach and ALP by finding "that formal acts taken by the directors of ASI and AOE constitute functions performed by their head offices in relation to the Apple IP licenses."

The appeal also claims errors were made in applying the rules on the standard of proof the Commission must meet to show Ireland gave Apple an advantage, as well as two further points.

The case will call before a court in the coming months and could cost Apple north of $15 billion if the ruling is overturned.