EU top court ruling on Apple tax case delayed until after summer

The EU’s top court is now set to deliver its keenly-awaited ruling on Apple’s tax affairs in the Republic by September at the earlier – months later than had been expected in Government circles, according to sources.

A key adviser to the European Court of Justice (ECJ) recommended last November that it set aside a 2020 EU general court ruling that the European Commission had failed to stand up a claim that the iPhone maker owed the Republic more than €13 billion in back taxes, plus interest.

The ECJ typically rules on cases between three and six months after such an adviser, known as an advocate general, issues an opinion. There had been an expectation in Dublin that the ECJ decision would have been out by now.

Sources said it will not be issued until after the court’s summer recess, which spans from mid-July to the end of August.

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

[ Explainer: Apple’s Irish tax case faces key opinion in advance of final ECJ ruling ]

Mr Pitruzzella proposed the ECJ refer the case back to the general court for a new decision on the merits. This could see the case, which stems from the commission first looking into Apple’s Irish taxes in 2013, dragging until the end of this decade.

The views of advocate generals are typically followed by the court.

“The explicit statement in the opinion that the ECJ could not find in favour of Ireland and Apple due to errors of law by the general court is likely one that is causing significant deliberation by the ECJ and may be contributing to the perceived delay,” said Kevin Mangan, co-head of tax at law firm Mason Hayes & Curran.

“Given the amounts involved and that the ECJ in November 2022 found in favour of Fiat and Luxembourg in one of the other significant tax state aid cases, the stakes for the parties, particularly the Commission, could not be higher.”

Ronan Dunne, head of competition, regulated markets and EU law with Philip Lee, said the length of time the decision is taking reflects the magnitude and complexity of the case.

“While an advocate general’s view will always be taken into consideration, it is essentially treated as general legal advice by the court who will, ultimately, come to its own determination,” he said.

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.

[ Apple’s €13bn Irish tax case timeline ]

The commission said the rulings gave Apple 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 2022. 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.