'Complete overstatement' to say that ECJ ruling is crucial for Apple tax appeal - Govt

The European Court of Justice ruled that the Commission may have been correct in finding that tax breaks provided to two Spanish companies – one involving banking giant Santander – on their foreign holdings were illegal.

The verdict could have repercussions for the Government’s legal battle against the Commission’s decision in the Apple case.

Ireland has challenged the EU ruling that Apple owes Ireland €13bn in back taxes and has appealed it to the European courts.

However, the Department of Finance has rejected this, stating that the grounds on which the Apple appeal is founded "makes it very clear that this application for annulment is not dependent on one single legal argument or legal issue".

“It is a complete overstatement to say that the Irish appeal of the Apple decision is dependent on the outcome of the Santander and Autogrill decision of the European Court of Justice, or that today’s judgement is crucial for the Irish case,” a spokesman told independent.ie.

“The facts and the approach in the Santander and Autogrill cases are very different from those that have now been presented in the final decision in the Apple case.”

The Court of Justice said yesterday that the Luxembourg-based General Court – the same European court that the Apple case has been referred to – had been incorrect to annul the Commission’s decision relating to the Spanish companies.

Although the Santander case is different to the Apple case in terms of substance and fact, the ruling signals that Europe’s top court is willing to take a wider view of what constitutes state aid. And that will potentially rattle nerves here, where there’s cross-party support for the appeal.

The European Commission, in two rulings in 2009 and 2011, said the scheme, which applied to Spanish companies holding a stake of at least 5pc in a foreign company for at least a year, broke EU state aid rules, and ordered Spain to recover the money.

The Spanish scheme allowed a company based in Spain to write down goodwill of a foreign shareholding and deduct this from its corporation tax. This did not apply to domestic shareholdings.

The European Commission said it welcomed the judgment, saying its state aid decisions were reinstated and that it would now work with Spanish authorities to recover the aid granted.

The ruling comes just days after the Commission published its final decision in the Apple case.

The Government has accused the Brussels body of interfering with Ireland’s tax sovereignty and has exceeded its powers in ordering the technology giant to pay €13bn in taxes to the Exchequer.

The Government said that the commission has attempted to “re-write the Irish corporation tax rules” in making its decision. Finance Minister Michael Noonan has already insisted that the California tech giant was not given any sweetheart tax deals when it opened its base in Cork in 1980.

Apple has also denied any such arrangements are in place at present, or that they existed in the past. (Additional reporting Reuters)