EU Legal Advisor Urges Apple's Settlement of €13 Billion in Irish Tax Dispute

In the ongoing legal tussle between the European Union, Apple, and the Irish government, a legal adviser to the European Court of Justice is recommending a reevaluation of the ruling that allowed Apple to circumvent paying €13bn (£11bn) in back taxes. This development is the latest chapter in a protracted saga that began three years ago when a ruling, which initially found Apple benefiting from illegal tax breaks provided by the Irish government, was later overturned.

Advocate General Giovanni Pitruzzella at the Court of Justice contends that the case merits another review, citing a series of legal errors and asserting that the original ruling in Apple's favor failed to accurately assess certain methodological errors that, according to the Commission decision, tainted the tax rulings.

While this legal opinion is not a conclusive verdict and lacks binding force, the Court of Justice frequently aligns with such recommendations. Apple, in response to the recent development, reaffirms its position, emphasizing that the initial ruling was explicit in stating that the company received no selective advantage or state aid.

The European Commission's decision in 2016 concluded that Apple had enjoyed unfair preferential treatment from the Irish government, enabling it to pay substantially lower taxes compared to other corporations. The Commission asserted that this constituted illegal aid provided to Apple by the Irish state, emblematic of the EU's efforts to combat what it deemed extensive tax avoidance by multinational giants.

In contrast, the Irish government contends that Apple should not be obligated to repay the back taxes, justifying the loss as a strategic move to make the country an attractive hub for large corporations. Ireland, boasting one of the EU's lowest corporate tax rates, serves as Apple's base for Europe, the Middle East, and Africa.

Despite national corporate tax rates falling outside the EU's jurisdiction, the bloc has extensive powers to regulate state aid. In this case, the argument centers on the contention that Ireland, by applying very low tax rates to Apple, is providing the tech giant with an unfair subsidy.

Two years ago, the General Court, a lower court, ruled in favor of Apple, declaring that the European Commission's decision for Apple to pay back taxes was legally flawed and should be set aside. However, this latest twist raises the possibility of overturning that ruling, further extending the legal drama.

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