In 2016, the European Commission (EC) decided that two tax rulings, issued by the Irish tax authorities in favour of Apple companies, constituted state aid unlawfully put into effect by Ireland. The EC declared that Ireland must collect €13 billion in unpaid taxes from the Apple companies as this state aid was incompatible with internal market regulations.
Apple companies and Ireland contested the above decision of the EC, and the General Court of the EU issued a judgement (Case T-778/16 and Case T-892/16) annulling the EC decision.
According to the General Court, EC was wrong to declare that Apple companies had been granted a selective economic advantage and, by extension, state aid. Furthermore, the General Court rejected the conclusions of the EC that Ireland’s corporate tax rate should apply to the relevant activities, which were based on profits generated elsewhere. The General Court stated that the EC should have shown that the income represented the value of the activities actually carried out by the Irish branches of Apple companies.
It is expected that the EC will challenge this judgement of the General Court at the Court of Justice of the EU (CJEU).