EU loses Apple state aid case

Today, the General Court of the EU ruled that Ireland did not grant illegal state aid to Apple through contested tax rulings. According to the General Court, EU state aid rules require taxation to be based on the arm’s length principle, which means that tax should be levied over income allocable to value generated from functions in the jurisdiction. As a result, Ireland is not obliged to levy EUR 13 billion of tax related to IP income from functions performed outside of Ireland. The Commission can file appeal with the European Court of Justice.

The ruling is of great importance as it puts a limit to the actions by the European Commission in recent state aid cases.