In a significant court decision, Apple has been ordered to pay €13 billion to Ireland, marking a setback in its tax dispute with the European Union.
- The European Court of Justice annulled a previous ruling, citing that Ireland had provided unlawful state aid to Apple.
- Margrethe Vestager, the EU’s competition commissioner, initiated the case, highlighting illegal tax benefits granted to Apple.
- This ruling has considerable implications for multinational corporations and EU member states regarding profit allocation.
- The decision underscores the EU’s commitment to challenging Big Tech’s tax practices and equitable taxation.
In a significant move, the European Court of Justice has overturned a previous ruling, ordering Apple to pay €13 billion to Ireland. This decision marks a substantial setback in Apple’s long-standing tax dispute with the European Union.
The crux of the case, initiated by Margrethe Vestager, the EU’s competition commissioner, lies in Apple’s receipt of illegal state aid through what were described as ‘sweetheart’ tax arrangements with Ireland. These arrangements reportedly allowed Apple to exclude profits made internationally from Irish taxation, channelling them through two Irish subsidiaries.
This landmark ruling holds vast implications for multinational corporations and EU member states, particularly concerning how they apply transfer pricing to allocate profits across different jurisdictions. Experts believe it sends a resounding message that preferential tax treatments will no longer be tolerated by the European Union.
Despite Ireland’s attempts to downplay the ruling as of mere ‘historical relevance’, the nation will proceed with releasing the funds from the escrow account, following the court’s directive. Meanwhile, Vestager has celebrated the decision as a victory for European citizens and a step towards tax justice, reinforcing her commitment to combat harmful tax competition.
Coinciding with Apple’s judgement, the European judiciary concurrently upheld a €2.4 billion fine against Google for anti-competitive conduct. This parallel verdict further highlights the European Union’s intensified efforts to regulate the operations of major technology companies.
Ultimately, the ruling reinforces the European Union’s rigorous stance against corporate tax evasion by multinational corporations.
