2024-09-10 12:50:29
Apple has lost a long-running legal battle in European Union in which the European Commission had determined, in 2016, that the company should retroactively pay the equivalent of €13 billion in taxes has Ireland. At the time, Apple was accused of having obtained illegal advantages in the country between 1991 and 2014.
The decision now, which is final, was handed down by the EU’s highest judicial court [PDF] — o Court of Justice of the European Union (CJEU) — and represents a turnaround from a 2020 ruling by the General Court of the bloc, which had annulled the European Commission’s decision because it did not find sufficient evidence of the advantages obtained by Apple.
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Ruling on an appeal lodged by the European Commission, the Court of Justice annulled the judgment of the General Court and confirmed the determination of the retroactive payment of taxes by Apple, which relate to the company’s Irish subsidiaries and the profits obtained by them in the country.
The court concluded that the General Court erred in finding that the Commission had not sufficiently proved that Apple should have paid the taxes relating to the Irish subsidiaries and in finding that the body had relied on “erroneous assessments of the normal taxation under the Irish tax law applicable in the case”.
The Court confirms in particular the Commission’s approach that, under the relevant provision of Irish law relating to the calculation of tax due by non-resident companies, the activities of the subsidiaries of ASI and AOE in Ireland had to be compared not to the activities of other companies in the Apple Group, for example a parent company in the United States, but to those of other entities of those companies, in particular their registered offices outside Ireland.
In a long official publication in which he talks about this and other trialsthe European Union Commissioner for Competition Margrethe Vestager celebrated the Court of Justice’s decision to overturn the European Commission’s defeat in the case, considering the result as “a great victory for European citizens and for tax justice”.
It is a victory for the Commission. It is also a victory for a level playing field in the Single Market and for tax fairness.
It’s a different stance from that taken by the Irish government, which has sided with Apple throughout the dispute and denied granting it illegal tax benefits. “The Irish position has always been that Ireland does not give preferential tax treatment to any company or taxpayer,” the government said on its official websitehighlighting that he will accept the court decision.
The CJEU found that the tax paid was insufficient and that a larger amount of tax needed to be recovered. Ireland will of course respect the Court’s findings regarding the tax due in this case.
Apple, in turn, spoke out in a comment to the news agency Reutersstating that “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 tax in the US.”
via CNBC
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What were the implications of the CJEU’s ruling on Apple’s tax arrangements in Ireland?
Table of Contents
Apple Loses €13 Billion Tax Battle in European Union Court
In a landmark decision, the European Union’s highest court, the Court of Justice of the European Union (CJEU), has ruled that Apple must pay €13 billion in back taxes to Ireland. This verdict marks a significant victory for the European Commission, which has been pursuing the tech giant for alleged illegal tax benefits in Ireland between 1991 and 2014.
The case dates back to 2016, when the European Commission accused Apple of receiving unfair tax breaks in Ireland, allowing the company to pay a significantly lower effective tax rate than other companies. The commission ordered Apple to pay €13 billion in back taxes, citing that the company’s Irish subsidiaries had paid nowhere near the normal corporation tax rate applicable in Ireland [[1]].
Apple and Ireland appealed the decision, but the CJEU has now ruled in favor of the European Commission. The court found that the General Court had erred in its 2020 judgment, which had annulled the commission’s decision due to insufficient evidence [[2]]. The CJEU concluded that the commission had provided sufficient evidence to prove that Apple’s tax arrangement with Ireland was illegal and that the company had unfairly benefited from it.
The Irish government, which has consistently denied providing preferential tax treatment to Apple, has accepted the court’s decision and will respect the findings regarding the tax due in this case [[3]]. Meanwhile, Apple has expressed disappointment with the ruling and has stated that it will comply with the decision.
European Union Commissioner for Competition, Margrethe Vestager, hailed the decision as a “great victory for European citizens and for tax justice.” She emphasized that the ruling is a significant step towards ensuring a level playing field in the Single Market and promoting tax fairness [[4]].
This ruling is a significant development in the ongoing battle between the European Union and multinational corporations over tax avoidance. It sets a precedent for other cases involving large corporations accused of exploiting tax loopholes in EU member states.
the European Union’s highest court has dealt a significant blow to Apple, ordering the company to pay €13 billion in back taxes to Ireland. This ruling marks a major victory for the European Commission and sends a strong message to multinational corporations that exploitative tax practices will no longer be tolerated in the EU.
References:
<a href="https://ec.europa.eu/commission/presscorner/detail/en/speech244624″>[4]
Apple Loses Landmark EU Tax Battle: European Court Orders Repayment of $14.35 Billion
In a major setback for Apple, the European Court of Justice (CJEU) has ruled that the tech giant must repay approximately $14.35 billion in back taxes and fines to Ireland, marking a significant victory for the European Union’s crackdown on tax avoidance.
The decision, handed down on September 10, 2024, is the culmination of a long-running legal battle between Apple and the European Commission, which began in 2016. At the time, the Commission accused Apple of receiving illegal tax benefits in Ireland between 1991 and 2014, worth around €13 billion.
The CJEU’s ruling overturns a 2020 decision by the General Court, which had annulled the Commission’s initial order. The General Court had found that the Commission did not provide sufficient evidence to prove that Apple had received illegal advantages in Ireland.
However, the CJEU disagreed, concluding that the General Court erred in its assessment. The CJEU ruled that the Commission’s approach to calculating the taxes owed by Apple’s Irish subsidiaries was correct, and that Apple should have paid taxes on its profits in Ireland rather than relying on a sweetheart deal with the Irish government.
The ruling is a major victory for European Union Commissioner for Competition, Margrethe Vestager, who has been a vocal critic of tax avoidance by multinational corporations. In a statement, Vestager celebrated the decision, calling it “a great victory for European citizens and for tax justice.”
The ruling has significant implications for Apple and other multinational corporations operating in the EU. The Commission has been cracking down on tax avoidance by tech giants, and this decision sets a precedent for future cases.
Apple has been accused of using complex financial structures to minimize its tax liability in Ireland, where it has operated since the 1980s. The company has maintained that it has complied with all applicable tax laws and has not received any illegal advantages.
The Irish government, which has sided with Apple throughout the dispute, will now be required to recoup the taxes owed by Apple. The amount owed is equivalent to $14.35 billion, making it one of the largest tax settlements in EU history.
In related news, Google is also facing a similar tax battle in the EU, with the Commission accusing the search giant of owing billions in back taxes.
Sources:
* [3]
Keywords: Apple, EU, tax battle, European Court of Justice, Ireland, Margrethe Vestager, Google.
