European Commission prepares to appeal Apple’s win in court

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The EC will fight to overturn the ruling they say allowed Apple to avoid €13 billion in back taxes.

The European Commission has released the formulation of its appeal against a European Court’s decision that gave Apple a victory last year in a tax case that has been raging since 2017. In its appeal filing, the Commission the Court’s ruling was based on “contradictory reasoning” and committed legal errors.

The EU is contesting the decision by the bloc’s General Court in the €13 billion tax case, which ruled in favour of Ireland and Apple last July.

The EC’s appeal is the latest clash in a years long battle

The crux of the conflict between Apple and the EC has to do with unfair competition through special tax treatment that that Apple allegedly received from Ireland.

“This selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014,” wrote Margrethe Vestager, the EC’s Commissioner for Competition at the time.

For its part, Apple denied receiving any special treatment. “This claim has no basis in fact or in law,” Apple CEO Tim Cook said in 2016. “We never asked for, nor did we receive, any special deals.”

The European Union strikes back

The EC’s main claim is that the General Court wrongly conflated headcount at Apple’s Irish business units, and the responsibility they hold for allocating intellectual property. The EC described this as “a breach of procedure”.

“The General Court misinterprets the Decision by concluding that the primary finding of advantage relied solely on the lack of employees and physical presence in the head offices of ASI and AOE and did not attempt to show that the Irish branches of ASI (Apple Sales International) and AOE (Apple Operations International) in fact performed functions justifying the allocation of the Apple IP licences to those branches,” it said.

In a statement to Bloomberg, Apple said that he EU court “categorically annulled the commission’s case in July and the facts have not changed since then,” they said. “After a thorough review of the facts and the commission’s claims,” the judges were “clear in their determination that Apple has always abided by the law in Ireland, as we do everywhere we operate.”