Explainer: Apple’s tax woes

The European Commission has years of experience in bringing state-aid cases against companies and governments - so Apple is facing a long battle.

Luxembourg - Apple and Ireland have always vowed to go to court to fight a negative European Commission ruling over the iPhone maker’s fiscal affairs.

Tuesday’s colossal 13 billion-euro ($14.5 billion) repayment order means these appeals are set to go ahead - barring a last minute U-turn within Ireland’s coalition government - and will have to be filed at the EU’s General Court in Luxembourg.

Ireland received the commission’s full decision on Wednesday, and will want to study exactly why the regulator thinks the world’s richest company must pay back years of allegedly illegal tax breaks.

Given the EU order directly concerned only Ireland, Apple will have to wait a bit longer to get a copy of the decision. It may get one from Ireland, or it will have to wait several more months until a non-confidential version of the decision is published.

How soon will the appeal be filed?

From the moment they have official versions of the text, Apple and Ireland have just over two months to file their appeals.

Given that these EU state-aid probes into national tax arrangements are novel, the lawyers will want to take their time. They’ll need to study the probably very complex decision in detail before formulating the best possible claims that will give them a chance to win either a reduction of the recovery amount, or even an annulment.

Can we see all these documents?

Yes, but only a non-confidential version of the EU decision. This may take time, depending on how quickly the commission and Ireland can decide on all confidentiality issues. The EU’s previous state aid decision concerning the fiscal pact coffee giant Starbucks Corp. had with the Netherlands was announced last October and published only in June.

Only the party directly targeted gets the full EU decision. At the EU courts, it will be even trickier to see documents. Written appeal files in such cases are never made public by the EU courts. But a summary of the appeal will be published by the EU court and in the EU Official Journal, usually about two months after it’s been filed.

How soon will we get to a court ruling?

Don’t hold your breath. The EU General Court is known for its heavy workload and cases, especially of this complexity, are not likely to come to a decision anytime soon.

First, there will be a written procedure, with much to-ing and fro-ing between the EU court together with Apple, Ireland and the commission that could drag on for more than a year.

Again, none of this will be out in the open, but at the end of it all there will be an oral hearing, which normally is public.

A ruling will come several months after the hearing. This can then be appealed one last time at the EU Court of Justice, also based in Luxembourg.

What are Apple’s chances?

It won’t be easy for Apple or Ireland because the commission has years of experience in bringing state-aid cases against companies and governments, and fighting them in the EU courts.

But given these are unprecedented cases, they are harder to predict.

Apple’s and Ireland’s court fights will follow similar pending appeals of EU decisions concerning tax arrangements granted to units of multinationals in Luxembourg, the Netherlands and Belgium.

These have embroiled units of companies such as Fiat Chrysler Automobiles NV, Starbucks and Anheuser-Busch InBev NV, the world’s biggest brewer.

* With assistance from Adam Satariano, Dara Doyle and Peter Flanagan

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