Apple has lost a high-profile tax battle in a boost to efforts to clamp down on so-called “sweetheart” tax deals for multinationals with claims that the tech giant had benefited from billions-worth of unfair tax breaks from the Irish government.
The European court of Justice ruling comes amid years of legal wrangling over whether the European Commission was right to demand that €13 billion in “illegal” tax breaks for Apple should be repaid because of an unfair advantages.
The ECJ has therefore backed the commission’s 2016 decision that Ireland had granted Apple unlawful aid relating to the tax treatment of profits generated by Apple’s activities outside the US which Ireland is now required to recover.
The case brings to a close eight years of litigation when in 2016 the commission had ordered Apple to pay billions of euros for gross underpayment of tax on profits between 2003 and 2014.
Apple, who’s European headquarters are based in Cork since 1980, was found by the EU competition watchdog to have benefited from tax rulings from Irish authorities that meant in 2014 it in effect paid a tax rate of 0.005%.
Apple successfully challenged the ruling in the EU’s second highest court, which concluded in July 2020 that Brussels had failed to show that Apple had received an illegal economic advantage in Ireland over tax.
The commission appealed and last year the ECJ, recommended that it overturn the general court’s earlier decision, citing errors before recommending that the ECJ refer the case back to the general court on the merits of the case.
Apple said after the ECJ ruling: “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. Apple is proud to be an engine of growth and innovation across Europe and around the world, and to consistently be one of the largest taxpayers in the world.
“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 taxes in the US. We are disappointed with today’s decision as previously the general court reviewed the facts and categorically annulled this case.”
Meanwhile People Before Profit Finance spokesperson and Oireachtas Finance Committee member Richard Boyd Barrett said:
“ The Government must now move quickly to collect what is owed to the people of Ireland. These sweetheart deals have benefited massive corporations like Apple at the expense of the people of Ireland. This ruling is a vindication of our campaigning and a condemnation of successive Irish governments that have served the interests of the world’s largest corporations instead of ordinary people”.
“It’s a disgrace that the Government has spent many millions of Euros on legal fees trying to avoid collecting this money that is owed to the people of Ireland. I’m calling on the Government to confirm that it will no longer support Apple’s appeals and legal maneuvers. The Government’s cooperation with Apple has assisted Apple and prolonged this case. The Government must say if it will now drop any further appeals and legal participations with Apple against the tax owed.
The Government must now stop resisting collection of this tax and must immediately collect and use the funds to build the homes and invest in public services such as the health service, additional education needs places, and transport and other infrastructure projects that we so urgently need. The vast amount owed by Apple is enough to build over 40,000 new homes. The Government has let the housing crisis spiral out of control while working flat out to try and give €13.1bn that is owed to the Irish people to Apple’s shareholders. The Government must end its legal attempts to avoid collecting what is rightfully ours and must put the funds to work to end the housing crisis.”