In 2016 the Commission adopted a decision concerning two tax rulings issued by the Irish tax authorities (Irish Revenue) on 29 January 1991 and 23 May 2007 in favour of Apple Sales International (ASI) and Apple Operations Europe (AOE), which were companies incorporated in Ireland but not tax resident in Ireland. The contested tax rulings endorsed the methods used by ASI and AOE to determine their chargeable profits in Ireland, relating to the trading activity of their respective Irish branches. The 1991 tax ruling remained in force until 2007, when it was replaced by the 2007 tax ruling. The 2007 tax ruling then remained in force until Apple’s new business structure was implemented in Ireland in 2014.
By its decision, the Commission considered that the tax rulings in question constituted State aid unlawfully put into effect by Ireland, which aid was declared incompatible with the internal market. The Commission demanded the recovery of the aid in question amounting to 13 billion euro in unlawful tax advantages.
Ireland and ASI and AOR took the European Commission to General Court of the European Union to contest the decision by the European Commission (Cases T-778/16 and T892/16).
On the 15th of July, 2020 the General Court of the European Union upheld the pleas of Ireland, ASI and AOR on the basis that the Commission did not succeed in showing, in the present instance, that, by issuing the contested tax rulings, the Irish tax authorities had granted ASI and AOE a selective advantage for the purposes of Article 107(1) TFEU. The Court concluded that the Commission may classify a tax measure as State aid, only in so far as the conditions for such a classification are satisfied. Hence it followed that Commission did not succeed in showing to the requisite legal standard that there was a selective advantage for the purposes of Article 107(1) TFEU, and therefore the contested decision must be annulled in its entirety without it being necessary to examine the other pleas in law raised by Ireland and ASI and AOE.
Full text of the judgement on this link: Judgement Ireland v Commission Cases T-778/16 and T892/16
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