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The European Commission has secured a decisive legal victory over Apple in relation to the tech giant’s tax affairs in Ireland.
Europe’s highest court has ordered the iPhone maker to pay €13 billion ($14.4b) in back taxes as the bloc tightens the net on ‘sweetheart’ deals between member states and multinational companies.
As the news emerged on Tuesday morning, Apple shares were down 1% in premarket trading.
This tax saga dates back around 10 years when the EC (the executive branch of the European Union) launched a probe into the situation. This investigation was one of many, delving into the arrangements made by countries such as Ireland and Luxembourg to lure big tech firms to set up their European headquarters in the respective countries.
The European Court of Justice delivered its verdict that “Ireland granted Apple unlawful aid which Ireland is required to recover,” with a firm instruction that the ruling was the “final judgment” in the matter.
📢 Big News: European Commission unexpectedly wins its 14.2 billion euro tax case against Apple and Ireland before EU's highest court‼️ pic.twitter.com/NWhuaFYgKR
— Simon Van Dorpe (@simonvandorpe) September 10, 2024
EU Antitrust Chief Delighted With the Outcome
In 2016, the European Commission declared that Apple had received “illegal” tax benefits and was required to repay around $14 billion, resulting in a joint appeal by the Dublin government and the US tech multinational.
In 2020, the EU General Court ruled in favor of Apple and Ireland, stating the EC had not proven any tax advantage. The response of the Commission was to appeal the decision, sending the case to the Court of Justice, the EU’s second and highest level of justice.
Today’s ruling dismissed the General Court verdict in 2020, upholding the original order from the EC to instruct Apple to pay back €13 billion in taxes due to the terms it was given.
EU antitrust chief Margrethe Vestager was elated with the outcome, telling a press conference, “It’s very important to show European taxpayers that once in a while tax justice can be done.”
Apple spokesman Julien Trosdorf said on Tuesday the case had “never been about how much tax we pay but which government we are required to pay it to,” insisting the multinational is “one of the largest taxpayers in the world”.
