Apple has been ordered to pay 13 billion euros ($14.4 billion) in unpaid taxes to the Irish state, a court ruling that ends a decade-long dispute between Europe and the gigantic tech company.
In its judgment issued on Tuesday, the European Court of Justice (CJEU) agreed with European Commission ruling from 2016in which it was established that, for a period of more than 20 years, Apple had benefited from illegal tax breaks that constituted state aid from the Irish Government.
“The Court of Justice has delivered its final judgment in this case and confirmed the 2016 decision of the European Commission: Ireland has granted Apple unlawful aid which Ireland must recover,” the court said. in the statement.
“Today we have won a huge victory for European citizens and tax justice,” said Margrethe Vestager, European Commissioner for Competition. he said in a statement on X“Ireland provided illegal aid to Apple.”
The Irish government said it would respect the court’s decision and said it was of “historical significance only”, saying it dates back to revenues from 1991 and 2007 which “are no longer applicable” because it has made changes to its tax system. “Ireland’s position has always been that Ireland does not grant preferential tax treatment to any company or taxpayer,” the government statement was.
Dr Stephen Daly, a lecturer in tax law at King’s College London, said he was “stunned” by the decision, which comes after a long and bitter legal battle that resulted in the General Court of the European Union ruling in Apple’s favour in 2020.
“I really didn’t expect this,” Daly says. “I thought the Commission’s path to victory was incredibly narrow, because it had suffered some big defeats in similar cases against Fiat and Amazon. I thought it would be the same result. I’m also stunned because this is the biggest tax case in history: €13 billion — which will be more than the €14 billion after interest — will have to be repaid.”
The case concerns tax deals that Irish authorities struck with Apple in 1991 and 2007 to encourage the company to set up two European operations in the country. Other companies were not offered the same favourable terms, prompting the European Commission to accuse Ireland of giving Apple a “selective advantage”.
Ireland has long been under scrutiny for allegedly providing a tax haven for American companies. During his last term in the White House, current presidential candidate Donald Trump singled out the country in a speech in which he promised to bring “trillions of dollars” in tax revenue back to the US.
“For too long, our tax code has encouraged businesses to leave our country in search of lower tax rates.” he said in 2017“It happens — lots and lots of companies. They go to Ireland. They go everywhere.”
Daly said the ECJ ruling was “not good for Ireland.” “Ireland has always tried to position itself as a country that provides generous tax laws, but laws that are fair,” he said. “It has certainly hurt Ireland Inc.”