Apple has been ordered to pay a staggering fourteen billion dollars (€13b Euros) in back taxes to the Irish government following a final ruling by Europe’s highest court. This decision marks the end of an eight-year legal battle between Apple, the Irish government, and the European Union. The core issue was Apple’s tax arrangements in Ireland, which the EU deemed illegal state aid.Apple channeled revenue from its EU sales through its Irish headquarters, taking advantage of Ireland’s low corporate tax rate and special arrangements that further reduced its tax burden. In 2016, the EU declared these arrangements unlawful, stating that Apple owed the taxes that should have been collected. Both Apple and Ireland appealed the decision.
While Apple initially won an appeal, the EU took the case to a higher court. The European Court of Justice has now overturned the previous ruling, upholding the original finding that Apple received illegal state aid.
Apple’s facility in Cork, Ireland | Image credit — Apple
Apple expressed disappointment with the decision, maintaining that the case was about which government it should pay taxes to, not the amount. The company emphasized that it always pays its due taxes and never received any special deals. It further argued that the European Commission was attempting to retroactively change the rules and disregard international tax laws.
The Irish government will now transfer the €13 billion from an escrow account into its own treasury. There is hope that similar cases can be avoided in the future through the establishment of global rules for the taxation of multinational companies. Apple CEO Tim Cook has publicly supported this approach.This decision comes just a day after Apple’s iPhone 16 launch event. It has been speculated that this may have been the reason for the event to have been scheduled on a Monday, when traditionally the company holds these events on a Tuesday. Others argue the reason for the odd scheduling was due to the U.S. presidential debate taking place tonight and Apple’s fears that the magnitude of this event would take away from the excitement of its device launch.
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