Apple’s $15B tax victory faces appeal at top EU court

Apple’s victory over a record back-tax order faces a challenge at the European Union’s top court as Competition Commissioner Margrethe Vestager seeks to rescue her crackdown on allegedly unfair fiscal deals doled out to multinational companies.

The EU’s General Court “made a number of errors of law” when it sided with Apple in its ruling in July, the European Commission said in a statement on Friday announcing that it would appeal to the EU Court of Justice.

Slapping Apple with a $15 billion order in 2016 was a landmark case for Vestager, showing she had no fear of upsetting the world’s most valuable tech company or the U. S. Treasury. The move helped fuel an EU push to close tax loopholes that allowed some multinational companies to legally pay less tax in Europe.

But in a crushing blow to Vestager’s fair-tax crusade, judges in July concluded that the commission had failed to prove “to the requisite legal standard” that Ireland’s tax arrangements broke state-aid law by giving the iPhone maker an unfair advantage.

The EU appeal will drag out the case for at least another couple of years, with the possibility that regulators may still decide to re- evaluate the case to fix errors in their investigation identified by the lower court in July.

The commission said the lower court’s judgment “raises important legal issues that are of rel

evance” to how its investigators apply state aid rules to tax planning cases. The commission has since 2013 tried to unearth what it deems to be the most problematic examples of otherwise legal individual tax agreements, or tax rulings, for companies.

Apple said the earlier ruling “categorically annulled” the commission’s decision and that “the facts have not changed since then.”

“We will review the commission’s appeal when we receive it, however it will

not alter the factual conclusions of the General Court, which prove that we have always abided by the law in Ireland, as we do everywhere we operate,” Apple said.

Irish Finance Minister Paschal Donohoe said in a separate statement that the nation has “always been clear that the correct amount of Irish tax was paid and that Ireland provided no state aid to Apple.”

The commission’s decision to appeal “creates more uncertainty for investors looking at Ireland or the EU in respect of the EU tax landscape,” said Peter Vale, a tax partner at Grant Thornton Ireland.