Shares in Apple were under pressure on Friday, after the group produced a disappointing revenue forecast for the final three months of the year – its fiscal first quarter, covering the key Christmas sales period – amid weak demand for iPads, watches and AirPods.
Sales for the quarter are now expected to be flat compared to the same period last year, executives at the tech giant said late on Thursday. Wall Street analysts had pencilled in a 5 per cent increase, to $123 billion (€115 billion).
EU competition commissioner Margrethe Vestager is hoping Apple investors will have something else to complain about next Thursday, when an advisor to the European Court of Justice (ECJ) issues their keenly-anticipated view on the long-running battle over the iPhone maker’s Irish tax affairs.
Advocate general opinions are usually followed by the ECJ, which typically makes a final ruling about six months later.
Planning regulator Niall Cussen: We can overcome the housing crisis, ‘if we put our minds to it’
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
[ Apple reports another fall in sales in line with expectationsOpens in new window ]
At stake is more than €13 billion that sits in an escrow account in Dublin: the back taxes, plus interest, that Vestager ordered Apple to pay the Government in 2016.
Apple and the Government won an initial legal case in 2020, with the EU general court in Luxembourg deciding the commission failed to prove the tax was owed at all. Vestager’s officials, it said, fell short of demonstrating to “the requisite legal standard” that Apple had received illegal state aid through a “sweetheart” tax deal that gave it an unfair advantage over other companies.
The commission’s appeal against that ruling, heard in at the ECJ in May, was premised on claims that the lower EU court made “legal errors” in its judgment three years ago.
Vestager knows all too well that her attempts to use state-aid rules to take on multinationals over tax have generally come a cropper before the courts. Last November, the ECJ overturned an earlier court ruling that the commission was correct in ordering Fiat Chrysler to pay Luxembourg €30 million in back taxes.
The general court moved in 2019 to quash a commission order that Starbucks pay the Netherlands up to €30 million. Meanwhile, an ECJ advocate general said in June that the commission and general court were wrong in finding that Luxembourg had granted €250 million of illegal tax benefits to Amazon.
The general mood in Government circles is that it’ll soon be releasing the funds in escrow bank to Apple. But what if Vestager secures a rare tax-aid victory?
