Apple tax: what next?
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
Apple could be forced to pay more than €13 billion (£11.3 billion) in tax after a new twist in the legal battle between the tech giant and the European Union.
An advisor to the European Court of Justice has said that a 2020 ruling that backed Apple’s appeal against paying the tax bill should be reconsidered.
The legal battle between Apple and the EU has rumbled on for seven years and is an example of how European regulators have led a push against the US tech giants and sweetheart tax deals. It is also a fascinating case study about how far governments should be allowed to go in providing incentives for a company to invest in their country.
The European Commission announced the €13 billion tax bill for Apple in 2016, which was the largest ever corporate tax order. The commission claimed that Apple had been given preferential and unfair treatment by the Irish government which allowed the company to pay little corporation tax. However, Apple won an appeal against the ruling in 2020.
You can find the latest statement from the European Union’s Court of Justice here. Advocate general Giovanni Pitruzzella said the 2020 ruling in favour of Apple involved “a series of errors in law” and “failed to assess correctly the substance and consequences of certain methodological errors”.
The advice from Pitruzzella is non-binding and the EU courts must now decide how to proceed.
Ireland collected €14.3 billion from Apple regarding the disputed tax bill in 2018 but has held the money in escrow due to the ongoing legal battle. Michael McGrath, Ireland’s minister for finance, said today:
“I note the opinion of the advocate general. It is important to bear in mind that this opinion does not form part of the Court of Justice of the European Union judgment but is considered by the court when arriving at its final ruling.
“My department and the state’s legal team will consider the full opinion of the advocate general in detail.
“It has always been, and remains, Ireland’s position that the correct amount of Irish tax was paid and that Ireland provided no state aid to Apple. We now await the judgment of the Court of Justice of the European Union on this matter.”
You can find that statement here
Apple said in a statement:
"We thank the court for its time and ongoing consideration in this case. The General Court’s ruling was very clear that Apple received no selective advantage and no state aid, and we believe that should be upheld.”
Shares in Apple were flat in pre-market trading in the US following the statement from the court.
Other stories that matter…
1. The bike maker Raleigh is planning to cut jobs and move its Nottinghamshire headquarters. Story by TheBusinessDesk here
2. Jeremy Hunt, the chancellor, is working on plans to change Isas in the Autumn Statement. These changes could include savers being allowed to move their money to better-paying Isas and the removal of restrictions on how many Isas you can open without losing a £20,000 tax allowance. You can read more in a story by The Telegraph here
3. The Financial Times has done a useful summary of the changes the UK is actually making to its corporate governance rules after a potential bill was excluded from the King’s Speech on Tuesday and other proposals were delayed. Not many of the original proposals have survived. Piece here
4. Ed Conway, the economics editor of Sky News, has analysed the complexity of supply chains around the world by looking at a factory just outside Birmingham run by Brandauer, which makes super-thin metals. Piece here
5. “Ideas come from everywhere. I’ve done a remake, I’ve made adaptations from comic books and novels, and I’ve written original screenplays. I’m open to anything. But as a writer and director, whatever I do, I have to feel like I own it completely. I have to make it original to me: The initial seed of an idea may come from elsewhere, but it has to go through my fingers on a keyboard and come out through my eyes alone.” That quote is from a fascinating new interview with Christopher Nolan, the director. You can read the Variety piece here
And finally…
It’s that time of the year - the John Lewis Christmas advert has been released. This year the department store chain has worked with advertising agency Saatchi & Saatchi after ending its long partnership with Adam&EveDDB. You can watch the latest advert below:
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Best
Graham