One of Europe’s highest courts may have canceled the $ 15 billion back tax bill it imposed on Apple, but Competition Commissioner Margrethe Vestager is not giving up.
The stakes are high, not just in this specific case, but also in the European Commission’s broader quest to prevent multinationals from enjoying particularly advantageous tax deals, like the one it claims was concluded between Apple and Ireland, the base of Apple’s international operations. outside the Americas.
Then, on Friday, Vestager announced its antitrust department’s appeal against the EU General Court’s July ruling, which said the Commission had not sufficiently demonstrated that Ireland had given Apple special treatment, an action that would have meant that Ireland had effectively granted Apple illegal status. . help.
The Court of Justice of the European Communities (ECJ) is the highest judicial authority in the EU and has the final say on the interpretation of EU law.
The General Court, which together with the ECJ forms the EU Court of Justice – yes, the name is confusing – is mainly there to hear actions taken against EU institutions
Appeals against General Court judgments may be filed before the ECJ only for reasons of law and not for a discussion of the facts of the case.
The Commission’s problem here is that the July judgment of the General Court concerned mainly the facts of the Apple-Ireland case.
Rather than saying that the Commission made the wrong decision in interpreting the law, it said that the Commission was wrong because it could not support its claim that the income of Apple’s Irish subsidiaries, which handle the manufacture and distribution of Apple products throughout the world, were due in large part to the activities of those affiliates themselves, rather than to American intellectual property, as Apple and the Irish government have argued all along.
On Friday, the deadline for Vestager to file his appeal for cassation expired, and his brief statement on the matter left the legal errors allegedly committed by the General Court unclear. However, it suggested that the reasoning in the judgment had an impact on the Commission’s strategy of tackling tax issues through state aid.
The same court had already reversed a similar tax decision of his, regarding the treatment of Starbucks by the Dutch tax authorities, for similar reasons, but that was little compared to the iconic Apple-Ireland case. Vestager’s defeat in this case was seen in Brussels as a major embarrassment to Danish politics, which is currently in her second term as the EU’s antitrust chief.
More generally, however, it was a major setback for the Commission in its quest to get big tech companies to pay more taxes in European countries on the income from their operations in those countries.
There is still a push in Europe to introduce “digital taxes” on the local revenues of big tech multinationals. And on Thursday, the Financial Times reported that the Commission was preparing an assault on “structures that facilitate aggressive tax planning,” with the drain of public coffers from the coronavirus pandemic showing additional momentum. Ireland, the Netherlands, Luxembourg and Hungary are possible targets here.
