General Court (Seventh Chamber, sitting with five Judges) 15 July 2020, T-778/16 and T-892/16 (Ireland and Others v European Commission.)

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In joined Cases T‑778/16 and T‑892/16, the General Court (Seventh Chamber, Extended Composition) annulled Commission Decision (EU) 2017/1283, which had found that advance tax rulings issued by Ireland to Apple Sales International and Apple Operations Europe constituted unlawful State aid under Article 107(1) TFEU. The Court held that the Commission failed to demonstrate to the requisite legal standard the existence of a selective advantage, finding errors in all three lines of reasoning advanced: the primary line of reasoning incorrectly applied section 25 of the Taxes Consolidation Act 1997 and the arm's length principle by allocating Apple Group IP licences to the Irish branches through an impermissible exclusion approach rather than establishing actual control by those branches; the subsidiary line of reasoning failed to prove that identified methodological errors in the profit allocation methods actually reduced the companies' tax liability; and the alternative line of reasoning could not independently establish a selective advantage in the absence of proof of advantage through the other lines of reasoning or of a broad, criteria-free discretion exercised by the Irish tax authorities. The Commission was ordered to bear its own costs and those of Ireland (Case T‑778/16) and of Apple Sales International and Apple Operations Europe.AI