EU judges have definitively ruled in favour of the European Commission’s conclusion that the low taxes paid by the tech giant constituted an illegal subsidy.
Apple has lost a 13 billion euro lawsuit before the European Court of Justice over the low taxes it paid for years in Ireland. This is a surprising victory for Brussels in its campaign against sweetheart deals with multinationals.
The ruling, published on Tuesday, supports the European Commission and overturns an earlier ruling by a lower-ranking General Court. Brussels noted that the very low corporate tax rates (0.005%) paid by the technology giant represented illegal aid.
“Ireland gave Apple illegal aid that Irelandis obliged to recover”the Court of Justice said in a statement, issuing a “final judgment” on the matter.
Brussels’ battle against Big Tech
This is one of two victories today in Brussels’ battle against Big Tech, as Google lost another appeal against a €2.4 billion EU fine to promote their own services.
This brings to an end the career of Margrethe Vestager, whose dual term as EU antitrust chief ends in a couple of months. The Commission’s victory means that Apple will have to pay up to 13 billion euros (or even more, with interest and costs) to the Irish Treasury.
The Commission’s initial conclusion, now confirmed, came after LuxLeaks revelations about tax rulings that They implicated Jean-Claude Junckerthe former Luxembourg leader who was then president of the EU executive.
Vestager’s actions against large, mostly American multinationals such as Starbucks, Fiat Chrysler and Amazon earned her a rating from then-President Donald Trump of the EU’s “tax lady” who “really hates the United States.”
The case represented a rare and controversial foray by Brussels into tax policy, which is normally set by national capitals, and The EU only intervenes if tax breaks distort the internal market of the block.
The case revolved around the treatment of the iPhone maker’s intellectual property revenues and also whether the Commission was right in stating that those profits were to be assigned to their European base in Ireland.
The General Court of the EU ruled against the Commission in 2020but, following the conclusions prepared before the Court of Justice last November, Advocate General Giovanni Pitruzzella questioned the legal reasoning of the first instance judges. In financial terms, it represents The biggest case of the EU tax campaign, which has not otherwise had much success in the courts.
The Commission lost the appeals against McDonald’s, Starbucks and Engie, although in a recent interview with the podcast Euronews’ Radio SchumannVestager argued that her crusade had led to a series of national and international tax reforms.
Despite the billions he was set to make, The Irish Government opposed the Commission’s case; the country has become the European hub for several American technology companies.
Michael McGrath previously championed the company as Irish Finance Minister, and will now move to Brussels as European Commissioner, whose portfolio will be announced by President Ursula von der Leyen in the next few days.
Apple expressed its “disappointment” with the decision
“We always pay all the taxes we owe wherever we operate and There has never been any special treatment“a company spokesman said, adding that it is one of the largest contributors in the world.
“The European Commission is trying retroactively change the rules and ignore that, as required by international tax law, our income was already subject to tax in USA“the company added, arguing that it has already paid $20 billion (18 billion euros) in US taxes on the same profits.
ADVERTISINGBut the sentence has already been applauded by tax activistswho have been calling for some time to close what they consider to be loopholes in corporate tax.
“This sentence exposes the idyll between EU tax havens and multinationals“This is a long-overdue outcome,” Chiara Putaturo, an EU tax expert at the charity Oxfam, said in a statement. “Justice is long overdue after more than a decade of Ireland standing by and allowing Apple to avoid tax.”
The Commission and the Irish Treasury did not immediately respond to a request for comment, although VEstager is scheduled to speak to reporters later.
Add Comment