EU's top court to begin hearing Apple tax appeal case

If the ruling is overturned, the US tech giant would be forced to pay the multi-billion euro tax bill, along with €1 billion in interest. Picture: Sam Boal/Rollingnews.ie

The controversial case of Apple's tax affairs in Ireland is going back before the courts today.

The Government is accused of letting the US tech giant underpay tax to the tune of €13.1 billion to make Ireland a more favourable place to do business.

In 2016, the European Commission ordered the Government here to recover €14.3bn in taxes and interest from the US company, arguing Ireland gave the tech giant favourable tax terms.

The case centres on two tax rulings issued by the Revenue Commissioners in 1991 and 2007 in favour of two Apple companies that endorsed the methods they used to determine their chargeable profits in Ireland.

The EU Commission considered the tax rulings in question constituted unlawful State aid.

Both Apple and the Irish State rejected the decision of the commission and brought court actions against it.

In 2020, the General Court of the European Union annulled the decision taken by the commission in a significant victory for the company which has operated in Cork for more than 40 years.

That decision has since been appealed by the Commission to the Court of Justice of the European Union (ECJ) which will hear the case on Tuesday.

If the ruling is overturned, the US tech giant would be forced to pay the multi-billion euro tax bill, along with €1 billion in interest.

The Taoiseach insists there was never a 'special deal' between the Government and Apple and said he looks forward to the appeal being unsuccessful.

The Government argues that individual states have a right to run their own tax affairs.

Economist Austin Hughes said that the EU is on a mission to deal with tax irregularities by large multi-nationals across Europe.

"From the Irish government's case and Apple's position, they feel they have done no wrong and the initial court decision vindicated that," said Mr Hughes.

If Ireland gets the €13bn, the country's reputational damage with multinationals could be significantly affected, Mr Hughes added.

"In those circumstances, the much- discussed €60-65 billion of Government surplus that are expected over the next couple of years could be placed at risk," he said.

Apple's legal team is confident it will be successful in the case, pointing to a similar victory for carmaker Fiat Crysler last year over the taxes it pays in Luxembourg. However, it is likely the case will take at least another year before it is concluded.