Apple has been ordered by the European Court of Justice to pay Ireland €13 billion ($14 billion) in unpaid taxes, concluding an eight-year dispute. The European Commission had accused Ireland of granting Apple illegal tax benefits back in 2016, a claim that the Irish government has continually disputed. The Irish authorities stated that they would comply with the ruling. In response, Apple expressed disappointment with the decision, arguing that the European Commission is attempting to change regulations retroactively.
In a separate ruling on the same day, the European Court of Justice ordered Google to pay a €2.4 billion fine for abuse of its market dominance. EU antitrust chief Margrethe Vestager hailed both decisions as significant victories for European citizens and tax fairness.
The ruling regarding Apple confirms the European Commission’s 2016 decision that Ireland provided unlawful aid to the company, which must now be recovered. This ruling brings closure to a lengthy legal saga that began with a decision affecting tax arrangements for Apple subsidiaries in Ireland from 1991 to 2014, which were deemed preferential compared to other businesses. Although a lower court previously overturned the Commission’s decision in 2020 following Ireland’s appeal, the higher court has now rectified this by identifying legal errors in the earlier ruling.
Apple maintains that the dispute is not about the amount of tax owed but which government should collect it, asserting that it has always fulfilled its tax obligations wherever it operates. The company criticized the European Commission’s attempts to retroactively alter tax rules and highlighted that its income had already been taxed in the US.
The European Court of Justice’s ruling means Ireland must recoup the taxes from Apple, a complex process that the Irish government has sought to avoid, believing that allowing Apple to retain its tax advantages benefits the country’s attractiveness to global corporations. Ireland has one of the lowest corporate tax rates in the EU, making it a significant base for many multinational companies.
This decision represents a major success for the European Commission in its efforts to prevent large corporations from exploiting tax regulations. The Irish government stated that the Apple case is now of “historical relevance only” and indicated that it would begin the process of transferring assets related to this ruling. Tove Maria Ryding from the European Network on Debt and Development welcomed the court’s decision but emphasized the need for comprehensive reforms to create a fairer and more transparent corporate tax system.