Since 2016, Apple has been facing a back tax case in Ireland that centers on allegations of undue tax advantages granted by the Irish government. The European Commission found that Apple had received preferential treatment, allowing it to pay taxes well below the normal rate on its European income. The case led to a multi-billion euro claim for reimbursement, but Apple and Ireland challenged the decision in the Court of Justice of the European Union. Now we have the final decision, Apple will have to pay!
Apple is well condemned to 13 billion euros
The Court of Justice of the European Union today issued a final ruling, upholding the European Commission’s 2016 decision on Apple’s illegal tax benefits in Ireland. The ruling ends a years-long legal battle and confirms that Apple will have to pay a whopping €13 billion in back taxes accumulated between 1991 and 2014.
The European Commission originally brought the case after it found that Ireland had granted illegal tax advantages to Apple for more than two decades. These advantages allowed the American giant to benefit from a derisory tax rate on a large part of its profits generated in Europe. The €13 billion claimed by the Commission corresponds to the sum of taxes not paid during this period.
The Court of Justice’s U-turn
In 2020, the General Court of the European Union overturned the Commission’s decision, arguing that Apple’s preferential treatment had not been sufficiently proven. The ruling was seen as a major victory for the Cupertino company and the Irish government, which sided with Apple in the case.
However, the Court of Justice of the European Union overturned this decision, ultimately ruling in favour of the European Commission. This reversal reaffirms the validity of the Commission’s position, which had denounced the tax advantages as being contrary to the rules of fair competition within the European single market.
Following this decision, Apple expressed (via a spokesperson) its disappointment, maintaining that no special tax agreement had been put in place with Ireland. The company continues to deny any form of preferential treatment, stating that its tax practices were in line with the laws in force at the time. For its part, the Irish government, which had supported Apple throughout the legal process, announced that it would now comply with the decision of the Court of Justice.
A victory for European tax justice
European Competition Commissioner Margrethe Vestager welcomed the decision, calling it “great victory for European citizens and for tax justice”She reiterated that this case sends a clear message: all companies, regardless of their size or influence, must pay their fair share of taxes in the European Union.
This landmark case highlights the European Union’s commitment to combating unfair tax practices and promoting fair competition in its market. For Apple, the bill is steep, but for Europe, it is above all a triumph for tax justice.