Apple tax case may drag on ‘close to 2030’ as court rerun looms

A long-running legal battle over Apple’s tax affairs in the Republic could drag on until close to the end of the decade, according to lawyers, after an adviser to the EU’s top court recommended the matter be sent back to a lower court because of “a series of errors of law” in an earlier judgment.

An advocate general at the European Court of Justice (ECJ) recommended on Thursday that the court set aside a general court ruling in 2020 that the European Commission had failed to stand up a claim that the iPhone maker owed the Republic more than €13 billion back taxes, plus interest.

In his opinion, advocate general Giovanni Pitruzzella said the lower court made a series of errors of law and also failed to assess “certain methodological errors” relating to Apple’s Irish tax liabilities.

Mr Pitruzzella proposes that the ECJ refer the case back to the general court for a new decision on the merits. The views of advocate generals in ECJ cases are typically followed by the court when it makes final rulings.

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“It’s taken seven years from the commission’s original determination in 2016 to get to this point, and we could now be looking at a similar timeframe to close out the case,” said Ronan Dunne, partner and head of EU, competition and state aid law at law firm Philip Lee.

“Assuming the ECJ follows the AG’s [Giovanni Pitruzzella] opinion when it delivers its judgment at some stage in the first quarter of 2024, the matter will then be referred to the EU’s general court for a full hearing on the merits but by reference to the parameters provided by the ECJ’s judgment. That could take three to four years. A further, and subsequent, appeal on a point of law to the ECJ after that point could take us close to 2030.”

Several other lawyers also said on Thursday that the case, which stems from the commission first looking into Apple’s Irish tax affairs a decade ago, is now likely to last for several more years.

EU competition commissioner Margrethe Vestager ordered Apple in 2016 to pay the State more than €13 billion in alleged back taxes, covering 2004 to 2014, as she claimed the Republic had given the US tech giant illegal tax aid.

The decision centred on two tax opinions, or “rulings” as they are referred to, handed out by Revenue in 1991 and 2007 to Apple subsidiaries in Ireland.

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The commission said the rulings gave the US technology giant an unfair and select advantage over other corporate taxpayers.

A legal appeal by Ireland and Apple against the commission’s decision resulted in a ruling by the EU general court in 2020 that Ms Vestager’s officials fell short of showing to “the requisite legal standard” that Apple had received illegal State aid.

However, the advocate general concluded the general court had made a series of errors of law in its ruling.

In 2018, the Government collected and put into escrow the alleged €14.3 billion of back taxes and interest the commission claimed the State was owed from Apple.

The size of that pot, which is mainly made up of investments in European government bonds rather than cash, had fallen to €13.4 billion by the end of last year. This was down to the effects of pervasive negative rates on European bonds in recent years and Apple being allowed to take out some money to pay taxes in other jurisdictions.