The General Court of the European Union (GCEU) has annulled the contested decision of the Commission that Ireland provided State aid in favour of Apple. Reacting to the judgment, Minister for Finance, Paschal Donohoe TD, said, “Ireland has always been clear that the correct level of tax was charged and Ireland provided no State aid to Apple.”

The Commission’s State aid decision in 2016 found that tax rulings favoured Apple Sales International (ASI) and Apple Operations Europe (AOE) and constituted unlawful State aid put into effect by Ireland. Both companies were Irish incorporated, but not Irish tax resident. The rulings endorsed methods used by the companies in determining their chargeable profits in Ireland, relating to the activities of the companies’ Irish branches.

The GCEU annulled the Commission’s decision on the basis that they did not show “the requisite legal standard that there was a tax advantage for the purposes of Article 107(1) TFEU”. The GCEU found the Commission had incorrectly concluded that Ireland had granted ASI and AOE a selective economic advantaged “ as a result of not having allocated the Apple Group intellectual property licences held by ASI and AOE, and consequently, all of ASI and AOE’s trading income, obtained from the Apple Group’s sales outside North and South America, to their Irish branches”.

The GCEU ruled that the Commission “should have shown that the income represented the value of the activities actually carried out by the Irish branches themselves”.

Further details can be found within the GCEU press release and the judgment of the General Court. A summary of the case has been included in the Tax Case Digest section of this issue.