Apple told to pay Ireland €13bn in tax by EU
Apple has been instructed by Europe’s highest court to pay Ireland €13 billion (£11 billion; $14 billion) in unpaid taxes, concluding an eight-year legal dispute.
In 2016, the European Commission alleged that Ireland had granted Apple illegal tax benefits, but Ireland has persistently contested the necessity of the payment.
The Irish government has announced it will comply with the ruling.
Apple expressed disappointment with the decision and accused the European Commission of attempting to “retroactively change the rules.”
Additionally, a ruling from the European Court of Justice (ECJ) on Tuesday ended a protracted case involving Google, resulting in a €2.4 billion (£2 billion) fine for abusing market dominance.
EU antitrust chief Margrethe Vestager praised both decisions, stating, “Today is a huge win for European citizens and tax justice.”
Regarding the Apple case, the ECJ affirmed: “The Court of Justice delivers a final judgment confirming the European Commission’s 2016 decision: Ireland provided Apple with unlawful aid that must be recovered.”
This ruling concludes a prolonged legal battle.
The initial decision covered the period from 1991 to 2014 and addressed the tax treatment of profits from two Apple subsidiaries based in Ireland. The tax arrangements were deemed illegal as they provided advantages unavailable to other companies.
That ruling came at a time when the Commission was attempting to clamp down on multinational giants it believed were using creative financial arrangements to reduce their tax bills.
It was overturned by the lower court of the ECJ in 2020 following an appeal by Ireland.
However, that verdict has now been set aside by the higher court, which said it contained legal errors.
Apple said in a statement: “This case has never been about how much tax we pay, but which government we are required to pay it to. We always pay all the taxes we owe wherever we operate and there has never been a special deal.
“The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US.
“We are disappointed with today’s decision as previously the General Court reviewed the facts and categorically annulled this case,” Apple added.
The bad news for Apple comes a day after the tech giant released its new iPhone 16 range.
The ECJ ruling means Ireland will have to recover the lost taxes from Apple – something Dublin has spent years of legal wrangling trying to avoid.
The Irish government has argued that Apple should not have to repay the back taxes, deeming that its loss was worth it to make the country an attractive home for large companies.
Ireland, which has one of the lowest corporate tax rates in the EU, is Apple’s base for Europe, the Middle East and Africa.
Although corporation tax rates for businesses are set nationally, and are not subject to the EU’s jurisdiction, the trade bloc does have extensive powers to regulate state aid and in this case, it argued that by applying very low tax rates to Apple, Ireland was granting it an unfair subsidy.
The latest decision is a colossal victory for the European Commission in its attempts to stop big companies bending the rules.
The Irish government said the issue in the Apple case was “now of historical relevance only” and said the process of transferring assets to Ireland would now begin.
Tove Maria Ryding from the European Network on Debt and Development, an association of trade unions and non-governmental organizations, welcomed the ECJ’s decision but stressed “Our tax problem is more than just one rotten apple”.
She said the case addressed tax matters dating back over 20 years and was “a perfect illustration of the chaotic corporate tax system we have”.
“What we urgently need is a fundamental reform that can give us a tax system that is fair, effective, transparent and predictable,” she said.
Europe’s top court has also ruled that Google must pay a €2.4bn fine for abusing the market dominance of its shopping comparison service.
The tech giant had been appealing against the fine, which was originally levied by the European Commission in 2017.
Google said it was disappointed with the ruling, and pointed out it had made changes in 2017 to comply with the Commission’s decision.
At the time it was the largest penalty the Commission had ever levied – though a year later it issued Google with an even bigger fine of €4.3bn over claims it used Android software to unfairly promote its own apps.
