Margrethe Vestager, who spearheaded the European Commission’s pursuit of the Apple tax case, has expressed her hope that the appeal will be successful, saying it is “not nice” to lose.
Europe’s second-highest court ruled in 2020 that Ireland did not give Apple illegal state aid, overturning a previous European Commission decision that the tech giant owed Revenue €13.1 billion in back taxes.
The Irish Government and Apple had both appealed the commission’s original 2016 ruling in the Luxembourg-based General Court. The outcome marked a setback for competition commissioner, Ms Vestager, who has made the tax crackdown a centrepiece of her time in office.
The commission later appealed the Apple tax court ruling to the European Court of Justice.
Apple has previously said the General Court judgment proved it has always complied with Irish laws. Both Apple and the Irish Government have denied any wrongdoing.
About €14 billion collected by the Government from Apple in 2018 at the direction of the commission, including interest, remains in escrow until the appeal is resolved.
Danish politician Ms Vestager is in Dublin for the congress of the Alde grouping of European political parties.
Asked about her hopes for the commission’s appeal in the Apple tax case, she replied: “Hold your breath. I hope we win.”
“It’s no good losing a case, I can tell you, especially when it’s not theory, when you take a decision. Of course, in theory, you do your best to make sure that you can win a case, When you lose it? Not nice.”
Ms Vestager said the court confirmed that state-aid tools and “the arm’s-length principle” can be used “in order to assess what are the internal price mechanisms that are being used for assessing taxable revenue”.
“So our methodology, the fact that we can use the state-aid tools, all that is still good and fine.”
She added: “Of course we appealed the case because we think that we have reasons to appeal the case.
“And our lawyers they defend it in order to try to convince the court that we should win it.”
Ms Vestager did not offer a prediction on when the appeal will be ruled upon. She said: “The calendar of the court is not something that I can have any influence on. I don’t know when the when they will decide.”
Asked what was at the heart of the case, Ms Vestager said it was two things.
The first is that most businesses “work really hard to make a profit” and they pay taxes from this. She argued that they are faced with competitors that “can organise their tax payment” and said “that is not fair”.
Ms Vestager said: “Second, we live in times where there is a huge need for public financing – to help vulnerable families to pay their energy bills; to enable housing for people who may not be able to buy a house themselves; for our security and defence to be increased; to invest in fighting climate change just to state the obvious.”
She said she thinks that is also “the situation here in Ireland”.
Ms Vestager said the commission’s strategy had been that the state-aid tool is “one tool, but it will not give us tax justice in the end”.
She said changes in legislation in the area were needed, and pointed to how Ireland, Luxembourg, Cyprus, Malta have all changed laws which she said “is really good”.
“European-wide we have given tax authorities better tools in order to know the full tax story of a company and not just you know, one chapter here or one chapter there.”
She said “last but not least” is the international agreement to bring in a 15 per cent effective corporate tax rate.
“Hopefully we’ll get there. When the international agreement is approved, we will be much closer to tax justice than we were just a couple of years ago.”
