Apple must refund Ireland $14 billion in unpaid taxes, Europe's top court rules

[Alfonso Maruccia]

What just happened? The European Court of Justice has finally resolved one of the longest legal battles between the European Union and an American tech company. Apple has been ordered to repay a significant sum in tax credits it improperly benefited from over the past decades.

According to the European Court of Justice (ECJ), Apple will have to repay Ireland €13 billion ($14 billion) in illegal tax credits the company benefited from for years. The latest ECJ ruling brings an end to a lengthy legal battle that began in 2016, when the European Commission formally accused Apple of exploiting Ireland's favorable tax system to avoid paying its fair share to the EU.

The ECJ statement confirms the European Commission's 2016 decision, which found that Ireland provided Apple with unlawful tax aid. As a result, Dublin authorities are now compelled to recover billions in unpaid taxes, despite their reluctance. The Commission's ruling covers the period from 1991 to 2014, during which Apple's Irish subsidiaries enjoyed an exceptionally favorable tax regime.

Apple's initial conviction was overturned by a lower ECJ court in 2020, following Ireland's appeal of the Commission's decision. However, the higher ECJ court has now reaffirmed that Ireland's tax arrangements were illegal, and Apple must repay the full amount. European Commissioner for Competition Margrethe Vestager hailed the ruling as a significant victory for European citizens and a step toward a fairer tax system across the continent.

Needless to say, Apple sees the situation quite differently. "This case has never been about how much tax we pay, but which government we are required to pay it to," Apple stated. The company emphasized that it has always paid its taxes and never sought a "special deal," adding that the European Commission now appears to be retroactively changing the rules. According to Apple, its income is already taxed in the US, in line with international tax laws.

Recently, Apple has faced a series of setbacks in its ongoing conflict with European regulators. Brussels is preparing to fine the company for violating the Digital Markets Act, and a second investigation could result in an additional, staggering $76 billion fine. While Apple is reportedly trying to loosen some of the restrictions tied to its iOS walled garden, European authorities are ramping up their crackdown on Big Tech like never before.

Tove Maria Ryding, from the European Network on Debt and Development, sees the ECJ's decision as a positive first step. Europe's tax problem is more than just one "rotten apple,'" Ryding remarked, noting that the ruling highlights the chaotic and unfair state of the corporate tax system in Europe. "What we urgently need is a fundamental reform that can deliver a tax system that is fair, effective, transparent, and predictable," she added.

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Apple must refund Ireland $14 billion in unpaid taxes, Europe's top court rules

 

[DanteSmith]

Europe imposes heavy taxes on consumption rather than income. Actually, they heavily tax both...
With a massive loss like $70 billion, it's better to exit Europe quickly.

 

[brucek]

I believe in tit-for-tat diplomacy. The US IRS should now pick some European companies who broke no laws and raid them for $14 billion anyway. We could try sending them the much larger bill for their chronic underfunding of their NATO responsibilities while we're at it.

To be clear, I'm not an expert on European law, and if Ireland broke a EU law I have no problem with the EU fining Ireland over it. But those should be the only two parties involved. Apple followed the law, kept it's side of the deal with Ireland, helped grow it's economy, and paid the taxes it owed according to Ireland's laws. Trying to rewrite history now is bogus.

 

[The Talking Tech]

Apple got caught avoiding taxes, and now it's time to pay up.

 

[Alfonso Maruccia]

Europe imposes heavy taxes on consumption rather than income. Actually, they heavily tax both...
With a massive loss like $70 billion, it's better to exit Europe quickly.

Yeah, the UK wanted to do just that, and quickly. The outcome has been fantastic, really.

 

[Vanderlinde]

Apple got caught avoiding taxes, and now it's time to pay up.

Not avoiding, they just looking for the best and cheapest TAX location in Europe. Ireland is one of them.

 

[WhiteLeaff]

Yeah, the UK wanted to do just that, and quickly. The outcome has been fantastic, really.

The whole of Europe is sinking because of its own subsequent wrong choices. It is not a sustainable economy in the long term.

 

[VitalyT]

Speaking of rotten apples, Ireland doesn't want the money. The government is scared shitless that other blue chips will lose interest in the Irish easy money wash, so they were hoping to lose the case. Gutless and dumb politicians, they will strip every last penny from the hard-working people, and give it to mega-corporations.

 

[AlexIL]

The whole of Europe is sinking because of its own subsequent wrong choices. It is not a sustainable economy in the long term.

Europe is sinking due to it's uncontrollable lawmaking getting it's nose into people lifes that state has no business at resulting in very comfortable life but total avoidance of anything that bears the name family or even remotely resembles it. As a result failure cascade of societies with rampant immigration where immigrants reasonably refuse to integrate into suicidal mindset that Europe of today is. No worries it seems US follow suit.

 

[toooooot]

I believe in tit-for-tat diplomacy. The US IRS should now pick some European companies who broke no laws and raid them for $14 billion anyway. We could try sending them the much larger bill for their chronic underfunding of their NATO responsibilities while we're at it.

To be clear, I'm not an expert on European law, and if Ireland broke a EU law I have no problem with the EU fining Ireland over it. But those should be the only two parties involved. Apple followed the law, kept it's side of the deal with Ireland, helped grow it's economy, and paid the taxes it owed according to Ireland's laws. Trying to rewrite history now is bogus.

I have heard of outrageous small taxes for corporations before in Ireland. Intel is there as well.
I have read in another article that they paid less than 5% in EU taxes, a very small amount on big profit. Obviously, it went on for years as EU was
deciding if Ireland broke EU law. Apparently so. The story came to an end.

 

[BuckarooBonzaii]

Well, the EU has finally caught on how to get rich quick. Austerity happened before and is creeping back. Whomever let immigration (one part) get out of hand into the EU deserves to be in Austerity.

 

[OortCloud]

Is EU is the only organisation with the clout to stick up to these mega-corporations and win. The US is so corrupt and its legal system is now so broken that you can win any case if you throw enough lawyers at it. This isn't some money grab, it's an attempt to make these awful, morally bankrupt, corporate juggernauts accountable for their actions.

 

[Puiu]

Not avoiding, they just looking for the best and cheapest TAX location in Europe. Ireland is one of them.

Neah, what they did was to avoid taxes by recording all sales, regardless of where they happened inside of the EU, in Ireland. The EU did well to uncover the illegal aid Apple got inside Ireland.

Well, the EU has finally caught on how to get rich quick. Austerity happened before and is creeping back. Whomever let immigration (one part) get out of hand into the EU deserves to be in Austerity.

It has nothing to do with austerity. What the EU is doing is correct and things are very complicated. Even if you ignore the EU, by Irish law, it is illegal to use Base erosion and profit shifting (BEPS), something Apple did in 2015 with its restructuring. The "illegal state-aid" mentioned by the EU in this situation are several private rulings that seem to allow Apple to bypass these laws. Ireland might lose its OECD-compliance because of this.

BEPS schemes have been banned in the EU for many years (some affected companies in Ireland include microsoft, facebook, pfizer, etc). Apple enjoyed corporate tax rates of under 1% since the 80s

There's a lot more to it than this and how companies are using Ireland to avoid paying taxes (schemes with having multiple subsidiaries in places like Bermuda or other countries that have very specific tax treaties with Ireland). The EU has started closing the loopholes in the past decade and US corporations are not happy.

 

[Thanthan]

Trust it to techspot commenters to defend a poor soulless megacorporation when it makes sure to pay as little in tax as possible, while still benefiting off of every taxpayer funded feature in the world. Education, infrastructure, Research, yadayadayada.

Also how come you guys don’t realise that this isn’t a judgement against apple? It’s a judgement against Ireland primarily. They’ve been found to have tax structures that are illegal according to EU law, and are being ordered to recoup losses to the union due to their illegal tax structures.

Also please don’t tell me that you sincerely believe that apple (and other megacorps) had no hand in the writing of these illegal tax codes that benefit no one but them. That’s just being a

 

[GoldenGoat]

I wonder, after all the fines, how much money Apple actually makes by doing business in Europe? I wonder how far the EU can push before Apple just discontinues business in Europe. If they are losing money by doing business in that market then why would they continue there?

 

[ChrisH1]

"This case has never been about how much tax we pay, but which government we are required to pay it to," Apple stated. Yeah, right, no doubt they set up a head office in Ireland because all the senior execs just wanted the best Guinness they could get.

 

[Thanthan]

I wonder, after all the fines, how much money Apple actually makes by doing business in Europe? I wonder how far the EU can push before Apple just discontinues business in Europe. If they are losing money by doing business in that market then why would they continue there?

When you look at App Store revenue, extremely far. Apple (and Google) are sitting on free cash due to owning the mobile industry. They charge 30% of app developers revenue for what amounts to hosting their app on a server

 

[McMurdeR]

I believe in tit-for-tat diplomacy. The US IRS should now pick some European companies who broke no laws and raid them for $14 billion anyway. We could try sending them the much larger bill for their chronic underfunding of their NATO responsibilities while we're at it.

To be clear, I'm not an expert on European law, and if Ireland broke a EU law I have no problem with the EU fining Ireland over it. But those should be the only two parties involved. Apple followed the law, kept it's side of the deal with Ireland, helped grow it's economy, and paid the taxes it owed according to Ireland's laws. Trying to rewrite history now is bogus.

That was pretty much Ireland's position, but there was more to the arrangement than just a low headline rate - Apple basically weren't paying anything close to that at all. The jist of this is that the agreement made between Ireland and Apple was illegal under EU competition law all along.

By the way, the money is going to Ireland. Ireland isn't in NATO.

 

[TempleOrion]

Yeah, the UK wanted to do just that, and quickly. The outcome has been fantastic, really.

Fantastic for who? Certainly not the UK, which is struggling to stay still, let alone grow, despite all the propaganda from right whingers about the sunlit uplands of prosperity for all LOL.

No wonder the liars and cheats of the tory party were thrown out...