Apple beats European Union in Tax Battle

By Rahul Vaimal, Associate Editor
Apple Logo
Representational Image

US-based American multinational technology company, Apple has won its appeal against a decision by the European Commission that it owes Irish $14.9 billion in taxes.

Today, the second-highest court in the European Union ruled that the Commission has failed to prove that Ireland had given the company illegal state aid through favorable tax agreements.

The European Commission — Europe’s biggest authority for antitrust — claimed in 2016 that Apple had been given an unfair benefit by the Irish government helping the iPhone manufacturer hold their tax bill unfairly lower for more than 20 years.

Ireland, a small country has become the European base for companies like Apple, Google and Facebook since it has one of Europe’s lowest corporate tax rates. It did not agree to this claim and hence teamed up with Apple to combat the Commission.

An Apple spokesperson in a statement said that;

“The issue was never about how much tax is paid, but where it is paid and we’re proud to be the largest taxpayer in the world as we know the important role tax payments play in society. Apple has paid more than $100 billion in corporate income taxes around the world in the last decade and tens of billions more in other taxes.”

Apple CEO Tim Cook has previously claimed that the decision has “no factual or legal basis,” calling it “obvious targeting against Apple”.

Welcoming the ruling, the Irish government repeated that it has not provided any special treatment to the iPhone makers.

“The correct amount of Irish tax was charged taxation in line with normal Irish taxation rules,” the finance ministry said in a statement.

The court ruling is a big blow to the Commission, which has been trying to clamp down on what it sees as unfair tax deals in Europe. The Commission may appeal the ruling to the highest court in Europe.

Margrethe Vestager
Margrethe Vestager

Margrethe Vestager, the top antitrust official of the Commission, said she was reviewing the judgment closely before deciding on the next measures. Yet she promised the Commission will continue to investigate vigorously what it sees as “illegal State aid”.

“At the same time, state aid enforcement needs to go hand in hand with a change in corporate philosophies and the right legislation to address loopholes and ensure transparency. We have made a lot of progress already at national, European and global levels, and we need to continue to work together to succeed,” Vestager said in a statement.