The General Court of the European Union (the "Court") annulled the 2016 decision of the European Commission ("Commission") regarding the illegal State aid granted by Ireland to Apple through the issuance of two tax rulings.


The Irish tax authorities issued two tax rulings, on 29 January 1991 and 23 May 2007, in favour of two Apple companies (ASI and AOE) which had a trading activity in Ireland through their respective Irish branches. According to the profit allocation methods endorsed by the Irish tax rulings, ASI and AOE attributed the vast majority of their profits to "head offices". These profits allocated to the "head offices" were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force.

By its 2016 decision (SA.38373), the Commission considered that the tax rulings in question constituted illegal State aid under EU State aid rules, and ordered Apple to pay back EUR 13 billion to Ireland (plus interest),representing the undue tax advantage.

Ireland (Case T-778/16) and the two Apple group companies (Case T-892/16) brought actions before the Court seeking the annulment of the Commission's decision.

The decision

On 15 July 2020, the Court annulled the decision taken by the Commission by considering that the Commission failed in demonstrating that the Irish tax authorities had granted Apple a selective advantage that could constitute illegal State aid.

In particular, the Court considered that the Commission did not succeed in showing:

  • that the trading income of ASI and AOE represented the value of the activities actually carried out by the Irish branches themselves (in view of their functions, assets and risks);
  • the methodological errors in the contested tax rulings which would have led to a reduction in ASI and AOE's chargeable profits in Ireland; and
  • that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.

The Court's decisions may be appealed, on points of law only, before the Court of Justice of the European Union (CJEU) within 2 months and 10 days of notification of the decision.

The press release related to the decision as well as the judgment are available on the website of the CJEU.

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