Apple Wins Appeal Against $ 14.9 Billion EU Tax Bill


The EU’s second-highest court has reversed a ruling that ordered Apple to pay a record € 13 billion ($ 14.9 billion) in back taxes to the Irish government.

The decision was originally made by the European Commission in 2016 and was seen as a significant victory for Margrethe Vestager, the EU’s antitrust chief. Vestager concluded that a “love deal” by the Irish government meant that the iPhone maker paid an effective tax rate of less than 1 percent, a single preferential deal that counted as “illegal state aid.”

“Member states cannot grant tax benefits to selected companies; this is illegal under EU state aid rules,” said Vestager in 2016. “The Commission’s investigation concluded that Ireland granted Apple illegal tax benefits, which allowed him to pay substantially less tax than other companies for many years. ”

Both Apple and the Irish government contested this, and Apple CEO Tim Cook called the ruling “total political garbage.” The Irish government moved to appeal the decision, hoping to also refute allegations that the country was essentially a tax haven for the EU bloc.

Today, however, the 2016 decision was reversed by judges at the General Court of the European Union, who said in a statement that “the Commission failed to demonstrate the required legal standard that there was an advantage” for Apple.

“The General Court considers that the commission did not demonstrate, in its alternative line of reasoning, that the contested tax rulings were the result of the discretion exercised by the Irish tax authorities,” the court said.

The Irish Department of Finance welcomed the ruling, saying in a statement: “Ireland has always been clear that no special treatment was provided for [Apple]. The correct amount of Irish tax was collected, tax in line with normal Irish tax rules. “

Apple also welcomed the decision, saying the case “was not about the amount of tax we paid, but where we should pay it,” it reports. Bloomberg.

Margrethe Vestager, now Executive Vice President of the European Commission, said the Commission “will carefully study the trial and reflect on possible next steps.”

“The Commission fully supports the goal of all companies paying their fair share of taxes,” Vestager said in a statement. “If member states give multinational companies tax advantages that are not available to their rivals, this hurts fair competition in the EU.”

The Commission now has two months and ten days to appeal the decision to the Court of Justice of the European Union, the EU’s highest court. That decision will be final.

Update, July 15, 6:50 am ET: The story has been updated with comments from Margrethe Vestager.