In a significant legal development, Apple faces a major setback.
- The European Court of Justice ordered Apple to repay €13 billion.
- Ireland is required to recover these funds, previously in escrow.
- The decision challenges preferential tax deals within the EU.
- Experts foresee implications for multinational corporate taxation.
In a landmark judgement, the European Court of Justice has ruled against Apple, requiring the tech giant to repay €13 billion in taxes to Ireland. This sum, previously held in escrow, highlights the significant legal setback for the company.
The case was initiated in 2016 by the EU’s competition commissioner, Margrethe Vestager, who argued that Apple had benefited from an illegal state aid in the form of favourable tax arrangements with Ireland. Specifically, these arrangements enabled Apple to exclude non-US profits from Irish taxation by funnelling them through two Irish subsidiaries.
This ruling has broad implications for how multinational companies and EU member states handle the allocation of profits across different jurisdictions, particularly concerning transfer pricing practices. The decision exemplifies the EU’s determination to scrutinise and reform tax practices of major technology firms, ensuring that preferential deals are no longer viable.
Despite Ireland’s stance that the ruling holds ‘historical relevance,’ it is obliged to release the funds from escrow. This development reinforces the message that the EU is poised to challenge the tax practices of Big Tech and advocate for tax justice.
Margrethe Vestager’s leadership in this case is further bolstered by a similar court decision upholding a €2.4 billion fine against Google for anti-competitive behaviour, showcasing the EU’s rigorous approach to regulating large tech corporations.
The EU’s decisive stance underscores its commitment to equitable tax practices and regulation of big technology firms.
