The European Commission will appeal on Friday against a tax court ruling in favor of Apple and Ireland that found that the giant company ultimately does not have to pay 14.3 billion euros.
The EU General Court’s ruling in July found that the commission “failed to demonstrate” that Apple’s arrangements in Ireland amounted to “selective tax treatment” of the company. It overturned an earlier ruling that said the company had to pay €14.3 billion.
The ruling in favor of Apple and Ireland was seen as a blow to European Commissioner Margrethe Vestager to control giant technology companies and the tax arrangements that affect them.
The appeal means there could be years of further appeals in the case, which could be taken to the European Court of Justice.
"This case is very importantbecause it will set a precedent for cases we will want to fight in the future," said a European Union spokesman.
Friday is the deadline for the European Commission to appeal.
The committee's case was twofold and focused on two tax opinions – or "rulings" as they are referred to – issued in 1991 and 2007, the year the first iPhone and Apple's profits began to grow.
The committee's primary argument was that some Apple units were not taxed in Ireland. Only the activities of some Irish "branches" within the same units were subject to tax in the state.
The committee's view was that the valuable intellectual property (IP) behind Apple's products was located within the Irish branches, meaning most of the profits should be taxed in Dublin.
The General Court ruled that the commission had failed to prove that the valuable IP should have been allocated to the Irish branches. The second part of the commission’s case was that even if the Irish branches did not have the IP, the company failed to identify the profits that could be taxed in Ireland.
While the court said there were "errors" in Apple and Ireland's approach, it concluded that the commission failed to show that the company paid less tax in Ireland than it should have.
