Apple has been ordered to pay 13 billion euros ($14.4 billion) in unpaid taxes to the Irish state, in a court ruling that ends a decade-long battle between Europe and the big tech company.
In its ruling on Tuesday, the European Court of Justice (ECJ) unanimously stated that Decision of the European Commission in 2016which found that for a period of more than 20 years Apple got illegal tax benefits This was state aid from the Irish government.
“The Court delivers its final judgment in the case and confirms the European Commission’s 2016 decision: Ireland provided unlawful assistance to Apple, which Ireland must reverse,” the court said. A statement said.
“Today is a huge victory for European citizens and for tax justice,” said European Competition Commissioner Margrethe Vestager. X said in a statement. “Ireland provided illegal aid to Apple.”
The Irish government said it would respect the court’s decision, calling it a matter of “historical relevance only”, claiming it related to revenues from 1991 and 2007 that “no longer apply” because it had made changes to its tax system. “The Irish position has always been that Ireland does not grant preferential tax treatment to any company or taxpayer,” Read the government statement,
Stephen Daly, reader in tax law at King’s College London, says he is “shocked” by the decision, which comes after a lengthy legal battle that saw the European General Court rule in Apple’s favour in 2020.
“I really didn’t expect this to happen,” says Daly. “I thought the Commission’s path to victory was incredibly narrow because it had suffered some big defeats in similar cases against Fiat and Amazon. I thought this would have the same result. I’m also surprised because this is the biggest tax case in history: €13 billion – which will be more than €14 billion when you add interest – has to be paid back.”
The case relates to tax deals Irish authorities made with Apple in 1991 and 2007 to encourage it to set up headquarters for two European subsidiaries in the country. Other companies were not given the same favourable terms, leading the European Commission to accuse Ireland of “selectively favoring” Apple.
Ireland has long been under scrutiny for allegedly providing a tax haven for US companies. During his previous term in the White House, current presidential candidate Donald Trump named the country in a speech in which he vowed to bring back “trillions of dollars” of tax revenue to the US.
“For too long our tax code has encouraged companies to leave our country in search of lower tax rates,” he said in 2017“It happens – lots and lots of companies. They’re going to Ireland. They’re going everywhere.”
According to Daly, the ECJ’s decision “is not good for Ireland.” “Ireland has always tried to position itself as a country that offers generous tax rules but the rules are fair,” he says. “This has definitely hurt Ireland Inc.”
