In a landmark decision, the European Union's highest court has ordered Apple to pay €13 billion ($14 billion) in back taxes to Ireland, dealing a significant blow to the tech giant's tax practices in Europe.
The European Court of Justice (ECJ) ruled on Friday that Apple had received illegal state aid from Ireland through preferential tax arrangements, ending an eight-year legal battle. This final judgment overturns a previous decision that had sided with Apple, citing legal errors in that earlier ruling.
Key points of the decision:
- The ECJ confirmed the European Commission's 2016 finding that Ireland granted Apple unlawful tax benefits
- The court rejected arguments from both Apple and Ireland defending the tax arrangement
- The ruling states that Apple must repay €13 billion in unpaid taxes to Ireland for the period 1991-2014
Apple expressed disappointment with the decision, stating:
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 company argued that its income was already subject to taxation in the United States, accusing the European Commission of trying to retroactively change the rules.
Interestingly, Ireland had also opposed the European Commission's original decision, likely due to concerns about maintaining its attractiveness as a base for large tech companies. Apple employs around 6,000 people in Ireland and has operated a campus in Cork for over 40 years.
In a separate ruling on the same day, the ECJ also upheld a €2.4 billion ($2.6 billion) fine against Google for abusing its market dominance in shopping comparison services. This fine, originally levied in 2017, was the largest ever issued by the EU at the time.
These rulings represent significant victories for EU antitrust chief Margrethe Vestager, who has made pursuing the tax arrangements of Big Tech companies within the European Union a cornerstone of her tenure.
As both judgments are final, Apple and Google will now be required to pay their respective fines, marking a major shift in the EU's approach to taxing large multinational tech corporations.