The European Union has set out its grounds for appeal against Apple’s influence in its $ 13 billion ($ 15.8 billion) tax dispute, saying judges used “contradictory reasoning” when rule that Apple ‘s business in Ireland was not liable for large payments (via Bloomberg).
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In a summary of its appeal published earlier today, the EU reiterated its decision to challenge the court’s ruling last year. In July 2020, the EU General Court upheld Apple, saying that the arm of EU action, led by anti-trust Margrethe Vestager, had not revealed Ireland’s tax arrangements with the company. equivalent to illegal state aid.
The appeal alleges that the court unduly tied Apple’s number of employees at two of its Irish units and the company’s level of responsibility for intellectual property on iPhone and iPad sales throughout of Europe. Judges are said to have failed to properly assess the EU’s own Apple branches and showed “contradictory reasoning” in its conclusions.
The argument is largely based on where value is created and, therefore, where it should be taxed. Apple argues that all important company decisions are made at their headquarters in Cupertino, so profits should be taxed in the US
The July ruling came as a surprise to EU commissioners, who in recent years have been trying to regulate national taxes that effectively serve as illegal subsidies and close tax gaps that allow some multinational companies pay less in Europe. The final decision will now be made by the EU’s highest court, the Court of Justice of the European Union (CJEU).
While losing the appeal would be seen as a key solution for the European Commission, that would not stop it from pursuing further lines of scrutiny in relation to the tax settlement of multinational companies such as Apple. However, the Commission needed to be able to show more clearly that tax regulation provides a financial benefit to that company and thus includes illegal state aid.
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