In a significant ruling, the European Court of Justice has upheld the European Commission’s 2016 decision, ordering Apple to pay 13 billion euros ($14.4 billion) in back taxes to Ireland. The court found that Apple benefited from illegal tax breaks, artificially reducing its tax burden to as low as 0.005% in 2014.
The European Commission had accused Ireland of granting Apple sweetheart deals, allowing the company to pay significantly less tax than other businesses. The court’s ruling confirms that Ireland provided unlawful aid to Apple, which must now be recovered.
Apple expressed disappointment, arguing that the European Commission is trying to retroactively change tax rules and ignore that its income was already subject to taxes in the US. However, the ruling is final and cannot be appealed.
This marks a major victory for EU antitrust chief Margrethe Vestager in her efforts to combat tax avoidance by multinationals. Ireland will now be required to recover the unpaid taxes from Apple, setting a precedent for other EU countries to review their tax deals and potentially recover billions of euros in unpaid taxes.
