Apple has lost a major Irish tax battle with Brussels for €13bn (£11bn) in a decision that will strengthen the European Commission’s efforts to crack down on tax deals favouring multinationals.
The eagerly awaited ruling by the European Court of Justice (ECJ) comes after years of legal wrangling over whether the European Commission was right to demand in 2016 that €13 billion in “illegal” tax breaks be returned to Apple because they gave the iPhone maker an unfair advantage.
The ECJ ruled to overturn Apple’s lower court victory and uphold the Commission’s 2016 decision that Ireland had provided Apple with unlawful support relating to the tax treatment of profits generated by Apple’s activities outside the US which Ireland must now recover.
In 2020, the General Court, a court of first instance, annulled the Commission’s 2016 decision, arguing that it had not sufficiently demonstrated that Apple’s subsidiaries had enjoyed a selective advantage. Now, the CJEU has annulled that judgment and upheld the Commission’s 2016 decision.
The ruling is a victory for Margrethe Vestager, the EU’s competition chief, who concluded in 2016 that the iPhone maker had benefited from billions of dollars in unfair tax breaks from the Irish government.
Vestager, who is set to step down this year, has been seen as a tough-minded figure willing to take on powerful multinationals such as Fiat, Amazon and Starbucks over their tax bills. However, some of the cases have not stood the test of time and court decisions against Fiat in 2022 have since been overturned.
The case caps years of litigation that began in 2016, when the Commission ordered Apple to pay billions of euros for underpaying taxes on profits between 2003 and 2014. The EU competition watchdog found that Apple, which has had its European headquarters in Cork since 1980, had benefited from tax rulings by Irish authorities that meant it effectively paid a tax rate of 0.005% in 2014.
Apple had denied the allegations, saying no state aid had been paid and that Tim Cook, the chief executive, called The claims are “political nonsense.”
Apple successfully challenged the Commission before the General Court, the EU’s second-highest court, which… Completed In July 2020, Brussels had failed to prove that Apple had received an illegal economic advantage in Ireland through taxes.
The commission appealed and last year Giovanni Pitruzzella, the ECJ’s advocate general, recommended that the general court’s earlier decision be overturned. Pitruzzella said the general court had made errors of law and needed to conduct a fresh assessment. He recommended that the ECJ send the case back to the general court for a fresh ruling on the merits.
Pitruzzella’s recommendation was not legally binding and did not have to be followed by the ECJ, but the opinions of the Advocates General carry great weight and usually influence the court’s final decision.
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Apple said after the CJEU ruling: “This case has never been about how much tax we pay, but about which government we are obliged to pay it to. We always pay all the taxes we owe wherever we operate and there has never been any special treatment. Apple is proud to be a driver of growth and innovation across Europe and around the world, and to be consistently one of the world’s largest taxpayers.”
“The European Commission is attempting to change the rules retroactively, ignoring the fact that, as required by international tax law, our income was already subject to tax in the US. We are disappointed with today’s decision, as the General Court previously reviewed the facts and categorically overturned this case.”
On the other hand, the ECJ He also ruled against Google, confirming a €2.4 billion antitrust fine from the commission in a case that focused on Yeah Google unduly favored its own online shopping services. In this case, the attorney general said The ECJ ruled in January that Google should lose its appeal.
Google said: “We are disappointed with the court’s decision. This ruling relates to a very specific set of facts. We made changes in 2017 to comply with the European Commission’s decision. Our approach has worked successfully for over seven years, generating billions of clicks for over 800 comparison shopping services.”
