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After years of investigations and legal battles, the European Court of Justice ruled that Ireland granted Apple ‘unlawful aid’ and that the tech giant owes more than €13bn in taxes.
Apple has lost a major legal battle against a European Commission ruling and must pay Ireland €13bn in taxes.
After investigations and court battles spanning 10 years, the European Court of Justice (ECJ) has sided with the Commission’s view that Ireland granted Apple “unlawful aid” in the form of tax advantages.
The ECJ ruling sets aside the judgement of the EU’s General Court, which had annulled the European Commission’s decision in 2020. The ECJ said the General Court had “erred” in its ruling.
In 2016, the European Commission declared that Ireland had granted Apple illegal benefits between 1991 and 2014, stating that Apple had underpaid taxes totalling more than €13bn.
This began a lengthy battle in which Apple and Ireland’s Government sought to prevent this payment from being made. In 2020, the General Court of the EU annulled the decision calling for Apple to pay the bill, prompting the Commission to appeal the verdict.
At the time, the General Court said the Commission “did not succeed in showing to the requisite legal standard that there was an advantage” gained by Apple’s operations receiving the equivalent of State aid or better treatment than other companies.
In a non-legally binding opinion last year, the advocate general of the ECJ – Giovanni Pitruzzella – backed the Commission’s earlier verdict and disagreed with the General Court’s decision. The ECJ has made the same decision today (10 September).
Apple expressed disappointment with today’s ruling and claims the case was never about “how much tax we pay, but which government we are required to pay it to”.
“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,” an Apple spokesperson said. “We are disappointed with today’s decision as previously the General Court reviewed the facts and categorically annulled this case.”
Despite the opinion of Pitruzzella being shared last year, Grant Thornton Ireland tax partner Peter Vale said the ECJ’s ruling is a “big surprise to many” and claims the decision could be a blow to Ireland’s reputation.
“Of course this case relates to a very different era, tax legislation everywhere has been significantly overhauled since then,” Vale said. “There is also the point that it was nuances of the US tax system that facilitated many of the structures that have long since been closed down.
“However ‘if you’re explaining you’re losing’ and today’s decision will further fuel those that continue to accuse Ireland of having tax haven status.”
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