Ireland wins €13bn Apple tax appeal

While Ireland has won its case over Apple’s taxes, it is likely to be appealed again in the highest court in Europe.

The General Court in Luxembourg has ruled that the Republic of Ireland did not give tech giant Apple illegal state aid.

This decision overturns a European Commission decision four years ago that Apple owes Ireland’s Revenue Commissioners €13.1bn in back taxes.

“This case was not about how much tax we pay, but where we are required to pay it. We are proud to be the largest taxpayer in the world”

While the news is a resounding victory for Ireland – which is keen to safeguard its position as one of the leading destinations for foreign direct investment (FDI) in Europe – it is likely that the case could be appealed before the EU’s highest  court, the Court of Justice of European Union.

However, this could take up to a further three years before there is a final outcome.

As a result, most of the €14.3bn collected by the Irish Government in 2018 from the iPhone maker, including €1.3bn in interest, will remain in escrow until a final verdict is delivered.

Apple has been operating successfully in Ireland for 40 years

Apple has had a presence in Ireland since 1980 and is the country’s largest employer with more than 7,000 people.

In 2014, following an investigation, the European Commission alleged that Apple’s tax arrangements were improperly arranged to give the company a financial incentive in return to jobs. This was angrily rebuffed by both Apple and the Irish Government.

In August 2016, the Commission ruled that Ireland must recover €13bn in back taxes from Apple. Both Apple and the Government of the Republic of Ireland decided to appeal the decision, leading to today’s outcome.

In a statement on what could be the world’s biggest-ever anti-trust decision, Apple stated: “We thank the General Court. We are pleased they have annulled the Commission’s case. This case was not about how much tax we pay, but where we are required to pay it. We are proud to be the largest taxpayer in the world.”

In its judgement the General Court ruled: “The Commission did not succeed in showing to the request legal standard that there was an advantage for the purposes of Article 107(1) TFEU. According to the General court, the Commission was wrong to declare that ASI and AOE had been granted a selective economic advantage and, by extension, State aid.”

Written by John Kennedy (john.kennedy3@boi.com)

Published: 15 July, 2020