CJEU Rules Against Apple In Landmark State Aid Case

On 10 September 2024, the Court of Justice of the European Union (CJEU) sided with the European Commission and ruled that two Irish subsidiaries of the Apple group received unlawful State aid from Ireland. This judgment is final, and Ireland will have to finalise the recovery of more than EUR 13 billion. This judgment may boost the Commission's investigations in other pending cases after it had suffered several losses in the Fiat, Amazon and ENGIE cases, all concerning Luxembourg. Taxpayers should pay attention to the CJEU's approach to the functional analysis and supporting documentation.

Background

Through two tax rulings of 1991 and 2007, the Irish tax authorities confirmed that nearly all sales profits recorded by two Apple group subsidiaries, incorporated but not tax resident in Ireland, were attributable to head offices outside Ireland, rather than to their Irish trading branches. Ireland only taxed the profits of the branches.