EU Moves Forward With Appeal Against Apple's 'Contradictory' Tax Case Victory

The European Union has set out its grounds of appeal against Apple's victory in its $13 billion euro ($15.8 billion) tax dispute, saying that judges used "contradictory reasoning" when they ruled that Apple's business in Ireland was not liable for significant payments (via Bloomberg).

European Commisssion

In a summary of its appeal published earlier today, the EU set out its determination to challenge the court judgement from last year. In July 2020, the EU's General Court sided with Apple, and said the EU's executive arm, led by antitrust chief Margrethe Vestager, had failed to show Ireland's tax arrangements with the company were tantamount to illegal state aid.

The appeal alleges that the court improperly conflated Apple's number of employees at two of its Irish units and the company's level of responsibility for intellectual property on iPhone and iPad sales across Europe. Judges are said to have failed to properly weigh the EU's own analysis of Apple's Irish branches and showed "contradictory reasoning" in their findings.

The argument essentially centers on where value is created and, in turn, where it should be taxed. Apple argues that all important company decisions are made in its Cupertino headquarters, so profits should be taxed in the U.S.

July's ruling came as a surprise to EU commissioners, who have in recent years set about probing national tax rulings that effectively serve as illegal subsidies and closing tax loopholes that allow some multinational companies to lawfully pay less tax in Europe. The final decision will now be made by the EU's highest court, the Court of Justice of the European Union (CJEU).

Though losing the appeal would be seen as a major setback for the European Commission, it would not stop it from pursuing other lines of investigation into the tax arrangements of multinational companies such as Apple. However, the Commission would need to be able to demonstrate more clearly that tax rulings confer a financial advantage to the company in question and therefore constitute illegal state aid.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

betterbegood Avatar
20 months ago
Paying 0.5% in tax (or less) is fraudulent when everyone else is paying much much more. Sure you might have found a hole in the law, but your intention is to scam - end of the story. There is nothing to debate here: Pay your tax or redraw from the market.
Score: 15 Votes (Like | Disagree)
sofila Avatar
20 months ago
All of Apple defenders pointing to that hole in the law but knowing inside that 0.5% taxes is simply a scam. Long live to mighty AAPL
Score: 4 Votes (Like | Disagree)
gaximus Avatar
20 months ago
I think I’m missing something? Apple made a deal with Ireland, Apples pays Ireland Taxes that they both agreed to. But the EU doesn’t like the deal, shouldn’t the EU be suing Ireland for making the deal? Apple hasn’t done anything legally wrong here. Does the deal expire? Can they renegotiate when it does?
Score: 3 Votes (Like | Disagree)
Unsupported Avatar
20 months ago

Paying 0.5% in tax (or less) is fraudulent when everyone else is paying much much more. Sure you might have found a hole in the law, but your intention is to scam - end of the story. There is nothing to debate here: Pay your tax or redraw from the market.
There is a difference between Tax avoidance and Tax evasion. One is legal, the other is not.
Score: 3 Votes (Like | Disagree)
mazz0 Avatar
20 months ago

The argument essentially centers on where value is created and, in turn, where it should be taxed. Apple argues that all important company decisions are made in its Cupertino headquarters, so profits should be taxed in the U.S.
Wow, this is a complex issue isn’t it? What is “value”? Value for whom? If it’s value for the user then yeah, it comes from Cupertino. If it’s value for the shareholders then it comes from the sales, which happen where the customers are.

I think people would have more sympathy for Apple’s position if people thought they paid the right amount of tax in the US, but rightly or wrongly we get the impression that they don’t.

Imagine two companies:

Awesome Things:
Designs it’s products in Alistan.
Sells 100 units a year in Alistan.

Brilliant Stuff:
Designs it’s products in Alistan.
Sells 50 units a year in Alistan.
Sells 50 units a year in Boboa.

Their costs are the same, and their units sell for the same amount.

The hypothetical countries Alistan and Boboa have identical tax rules.

Intuitively you’d think Awesome Things and Brilliant Stuff should pay the same tax, but they don’t do they? Brilliant Stuff somehow ends up a lot less doesn’t it? Intuitively therefore it seems they’re avoiding their far share of tax.
Score: 3 Votes (Like | Disagree)
betterbegood Avatar
20 months ago

If the law is wrong, change the law. But if someone acts carefully and within the law, they should not be liable to retroactive penalties.
Wrong. In the western world, we define obvious misconduct in this way as following The Word Of The Law but not The Spirit Of The Law. Apple, which tries to be such a socially aware company fully understands the spirit of the law. They just don't care. That makes them a third country corrupt company from a financial standpoint.
Score: 2 Votes (Like | Disagree)

Related Stories

google logo

UK Supreme Court Sides With Google in Lawsuit Over Alleged Tracking of iOS Safari Users Without Their Consent

Wednesday November 10, 2021 2:23 am PST by
The United Kingdom's Supreme Court today sided with Google in restoring its appeal against a lawsuit that accused it of wrongly tracking users within the iPhone's Safari browser without their consent. According to the ruling, the judge believed that the lawsuit, which sought to ask for compensation from Google for millions of users allegedly affected by its tracking practices, is "officious" ...
fortnite apple featured

Apple Wins Stay in Epic Case, Won't Have to Implement App Store Changes Tomorrow

Wednesday December 8, 2021 11:45 am PST by
Apple has successfully won a stay on an injunction that would have required it to make sweeping App Store changes as soon as December 9, so for the time being, Apple can continue to require developers to use its in-app purchase system without offering alternatives. The judge in the ongoing Epic v. Apple lawsuit had ordered Apple to allow developers to provide customers with alternatives to...
iOS App Store General Feature Dock 2

Apple Would Rather Pay Up to €50 Million in Fines Than Address 'Gatekeeper' App Store Behavior, Says EU Chief

Wednesday February 23, 2022 6:14 am PST by
Apple would rather pay a maximum of €50 million in fines than address concerns brought forward by the Dutch competition authority regarding developer access to third-party payment methods on the App Store, the EU's head of digital policy, Margrethe Vestager, has said. During a speech about the digital economy and privacy (via TechCrunch), Vestager said that Apple "essentially prefers paying...
iOS App Store General Feature JoeBlue

Upcoming EU Sideloading Bill Would 'Cripple the Privacy and Security Protections' iPhone Users Expect, Says Apple

Thursday March 17, 2022 10:38 am PDT by
The European Union is set to introduce new legislation as soon as this month that would significantly affect how the App Store operates in Europe, reports The Wall Street Journal. The Digital Markets Act has been in development for some time and the finalized version that could be completed as soon as this month will allow for sideloading and alternate app store options. Apple will be...
app store blue banner

Apple Decreasing App Store Prices in the UK, South Africa, and Many European Countries

Tuesday August 3, 2021 10:56 am PDT by
Apple today told developers that it is updating App Store pricing in some countries due to taxes and changes in foreign exchange rates. Over the course of the next few days, app and in-app purchase pricing is set to decrease in South Africa, the United Kingdom, and all territories that use the Euro currency. Pricing of auto-renewable subscriptions will not change. Apple is increasing...
apple sales free tax hoilday

Apple Participating in Sales Tax Holiday for Select U.S. States

Friday July 9, 2021 7:31 am PDT by
For the next several weeks, Apple is offering customers in a select number of U.S. states the opportunity to purchase a wide range of its products without a sales tax. Every year, select states offer businesses and consumers the incentive of having no sales tax as a way to help boost sales and are usually aimed at helping families lower the cost of back to school shopping. The dates for each ...
iOS App Store General Feature Desaturated

Apple Fined Another €5 Million Over Dating Apps as Dutch Regulators Say Apple Has 'Refused to Put Forward Any Serious Proposals'

Monday February 21, 2022 12:10 pm PST by
Dutch regulators have levied another fine of €5 million against Apple in a continued dispute over alternative payment systems for dating apps. Apple's total fines have now reached €25 million as regulators assess weekly fines up to a total of €50 million or until Apple satisfies the regulatory requirements. In a statement shared with TechCrunch, the Authority for Consumers and Markets (ACM)...
app store blue banner epic 1

Judge Says Apple Has Until December 9 to Make App Store Change Letting Developers Link to Alternate Payment Methods

Tuesday November 9, 2021 5:37 pm PST by
Following a virtual hearing earlier today, Judge Yvonne Gonzalez Rogers has denied Apple's request to delay the implementation of a permanent injunction that will require Apple to make significant App Store changes. As part of the judgement in the Apple v. Epic lawsuit, Judge Gonzalez Rogers is requiring Apple to allow developers to add in-app links to outside websites, paving the way for...

Popular Stories

iPhone 14 Pro Purple Rear Flat MacRumors Exclusive

iPhone 14 Pro Predicted to Start With Increased 256GB Storage Alongside Rumored Price Increase

Wednesday August 10, 2022 11:14 am PDT by
Earlier today, analyst Ming-Chi Kuo claimed iPhone 14 Pro models will be more expensive than iPhone 13 Pro models. Kuo did not reveal exact pricing, but he said that the average selling price of all four iPhone 14 models will increase by about 15% overall. While higher prices would be disappointing for customers, it is possible the iPhone 14 Pro and iPhone 14 Pro Max will offer increased...
iOS 16 battery percentage

Apple Limiting iOS 16 Beta 5 Battery Percentage Display to Select iPhones: Here Are the Supported Devices

Tuesday August 9, 2022 2:51 am PDT by
Apple this week brought back one of the most highly requested features from iOS users since the launch of the iPhone X in 2017: the ability to see your battery percentage directly in the status bar. Ever since the launch of the iPhone X with the notch, Apple has not allowed users to show their battery percentage directly in the status bar, forcing them to swipe down into Control Center to...
iPhone 14 Pro Lineup Feature Silver

Kuo: Apple to Increase Prices of iPhone 14 Pro Models

Wednesday August 10, 2022 8:22 am PDT by
Apple plans to increase the prices of iPhone 14 Pro models compared to iPhone 13 Pro models, according to analyst Ming-Chi Kuo. Kuo did not reveal exact pricing for the iPhone 14 Pro models. However, in a tweet today, he estimated that the average selling price of the iPhone 14 lineup as a whole will increase by about 15% compared to the iPhone 13 lineup. In the United States, the iPhone...
ios 16 beta 5 battery percent

iOS 16 Beta 5: Battery Percentage Now Displayed in iPhone Status Bar

Monday August 8, 2022 10:43 am PDT by
With the fifth beta of iOS 16, Apple has updated the battery icon on iPhones with Face ID to display the specific battery percentage rather than just a visual representation of battery level. The new battery indicator is available on iPhone 12 and iPhone 13 models, with the exception of the 5.4-inch iPhone 12/13 mini. It is also available on the iPhone 11 Pro and Pro Max, XS and XS Max, and...
battery percentage ios 16

Here's Why the iPhone Battery Status Icon in iOS 16 Is So Controversial

Wednesday August 10, 2022 4:34 am PDT by
In the latest iOS 16 beta, Apple has updated the status bar battery icon on iPhones with Face ID to display the exact percentage remaining rather than just a visual representation of battery level, and while the change has been largely welcomed, some users are unhappy with the way it has been implemented. In iOS 15 and earlier, battery percent has not been present on iPhones that have...
iPhone 14 Pro Purple Front and Back MacRumors Exclusive feature

iPhone 14 Is Just a Few Weeks Away: Three Tips to Prepare for the New iPhone

Wednesday August 10, 2022 4:08 am PDT by
The launch of the new iPhone 14 is just a few weeks away, meaning millions of iPhone customers will soon upgrade their existing iPhone or perhaps get an iPhone for the first time. Exclusive MacRumors iPhone 14 Pro renders by graphic designer Ian Zelbo Whether upgrading from an older model or this is your first iPhone, we've rounded up a few tips to help you prepare for the next flagship...
iPhone 14 Lineup Feature Purple

Color Options for All iPhone 14 Models: Everything We Know

Monday August 8, 2022 3:59 am PDT by
The iPhone 14 and iPhone 14 Pro models are rumored to be available in a refreshed range of color options, including an all-new purple color. Most expectations about the iPhone 14 lineup's color options come from an unverified post on Chinese social media site Weibo earlier this year. Overall, the iPhone 14 and iPhone 14 Pro's selection of color options could look fairly similar to those of the ...