Tax decision, Apple risks having to pay 13 billion to Ireland

Ireland’s tax rulings against Apple must be overturned. These are the conclusions of the General Advocate of the EU Court, Giovanni Pitruzzella, who is therefore asking the Union’s judiciary to review the decision of the main dispute between the European Commission and Ireland and Apple, which ruled in favor of the latter.

The case of Apple-Ireland

In 1991 and 2007, Ireland issued two tax rulings against two companies in the Apple group that would have allowed Apple to avoid 13 billion in Irish taxes. However, in 2016, the European Commission found that the decisions constituted “illegal state aid and incompatible with the internal market” that benefited the Apple group as a whole, and ordered Ireland to proceed with the recovery. In 2020, which was appealed by Ireland and Asi and Aoe, the Court of the Union annulled the decision of the Commission, finding that the latter had not proved the existence of an advantage arising from the adoption of tax rulings.

Reasons for Pitruzzella’s conclusions

According to the Advocate General, the General Court committed a number of errors of law when it assessed that the Commission did not sufficiently prove that the intellectual property licenses held by Asi and Aoe and the related profits, generated by the sale of Apple products outside the US, had to be attributed for tax purposes Irish branches. The independent lawyer also believes that the General Court did not correctly assess the existence and consequences of certain methodological errors that, according to the Commission’s decision, corrupted the tax rulings. According to the opinion of the independent lawyer, a new assessment by the Court is therefore necessary.

However, the conclusions of the independent lawyer are not binding on the Court of Justice. The judges of the Court are now starting the hearing on this case. The sentence will be pronounced later.

The case of Google

However, good news for Google. The judgment of the Court of the EU, after an appeal by an Austrian court, established that in the field of combating illegal content on the Internet, a member state “cannot impose” on a provider of a communication platform established in another member state. (in this case Google, ed) “general and abstract” obligations. A national approach of this kind is actually “contrary to Union law guaranteeing the free movement of services” mentioned through the principle of control in the Member State of origin of the service in question.

In 2021, Austria introduced a law that obliges domestic and foreign providers of communication platforms to establish mechanisms to declare and verify potentially illegal content. The administrative body ensures compliance with the provisions of the law and can impose fines of up to 10 million euros. Google Ireland, Meta Platforms Ireland and TikTok, three platforms founded in Ireland, claim that the Austrian law is contrary to EU law, in particular the IT Services Directive.

The Court recalls the objective of the Directive: to create a regulatory framework to guarantee the free movement of services of IT companies between Member States: from this perspective, the Directive removes the obstacles presented by the different national regimes applicable to these services thanks to the principle of control in the Member State of origin. It’s Ireland. It is true that, under strict conditions and in special cases, Member States other than the Member State of origin of the service in question may indeed take measures to ensure public order, the protection of public health, public safety or consumer protection. The European Commission and the Member State of origin must be notified of such specific deviations.

Digital Services Act, EU calls big tech to order

Meanwhile, the European Commission is sharpening its guns on DSA and calling big tech to account. Today it formally sent requests for information under the Digital Services Act (DSA) to Meta (owner of Facebook and Instagram) and Snap (owner of Snapchat). The Commission is asking companies to provide more information on the measures they take to meet their child protection obligations under the DSA, including obligations relating to risk assessments and mitigation measures to protect children online, particularly in relation to mental and physical health risks and the use of its services by minors.

Meta and Snap must submit the requested information to the Commission by December 1, 2023. Based on the evaluation of the responses, the Commission will assess further steps. This could lead to the official opening of the proceedings. The Commission may impose penalties for inaccurate, incomplete or misleading information in response to a request for information. In the absence of an answer, the Commission may request information by decision.

In this case, failure to respond within the deadline could result in the imposition of late penalties. Once designated as very large Internet platforms, the Meta and Snapchat platforms must comply with the entire set of provisions introduced by the DSA, including assessing and mitigating the risks associated with the dissemination of illegal and harmful content, any negative effects on the exercise of fundamental rights, including the rights of minors, and protection of minors. Already on October 19, 2023, Meta received a request for information regarding the spread of terrorist, violent and hate speech content, as well as the alleged spread of disinformation.

Both YouTube and Tik Tok – also considered very large platforms – are also in the EU’s crosshairs and have been asked to provide more information about the use of their services by minors and the measures taken to meet obligations in this regard. protection of minors in accordance with the Regulation on digital services, including obligations relating to risk assessment and mitigation measures to protect minors online, particularly in relation to risks to mental and physical health.

TikTok and YouTube must submit the requested information to the Commission by November 30, 2023. Based on the examination of the responses, the Commission will assess the next steps, which could include the formal initiation of proceedings under Article 66 of digital services.


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