Apple Ordered to Pay Ireland €13bn in Taxes After Eight-Year EU Legal Battle

In a landmark decision, Apple has been ordered to pay €13bn (£11bn; $14bn) in unpaid taxes to Ireland, following a ruling by Europe's top court. The ruling brings an end to an eight-year legal dispute over claims that Ireland granted Apple illegal tax advantages. The European Commission initially accused Ireland in 2016 of allowing Apple to pay substantially lower taxes, but Ireland has consistently resisted the ruling. The Irish government said it would respect the court’s latest decision, even though it had opposed collecting the back taxes. Apple expressed its disappointment with the ruling, accusing the European Commission of "retroactively changing the rules" and insisted that it has always paid taxes where required. The company stated, "This case has never been about how much tax we pay, but which government we are required to pay it to." The case centered on Apple’s subsidiaries in Ireland from 1991 to 2014. The European Court of Justice (ECJ) upheld the Commission’s claim that the favorable tax treatment violated EU laws because other companies did not have access to the same advantages. The decision also marks a victory for the EU’s antitrust chief, Margrethe Vestager, who praised the outcome, saying, "Today is a huge win for European citizens and tax justice."

Why Doesn't Ireland Want the Money? Despite the court’s order, Ireland has spent years trying to avoid recovering the taxes from Apple. The Irish government argued that its lenient tax policies have been essential for attracting major companies like Apple, and forcing the company to pay the back taxes could jeopardize its business-friendly environment. Ireland’s corporate tax rate, among the lowest in the EU, has made the country a hub for multinational companies. Apple’s operations in Ireland serve as its headquarters for Europe, the Middle East, and Africa. While tax rates are set nationally and are not subject to EU control, the Commission argued that Ireland’s actions amounted to providing an unfair subsidy to Apple, violating EU state aid rules. Apple’s legal defeat came just a day after the tech giant unveiled its new iPhone 16 range, adding further pressure to the company.

An Expensive Day for Tech Giants On the same day as the Apple ruling, Google was also handed a €2.4bn fine by the European Court for market dominance abuse regarding its shopping comparison service. The fine stems from a 2017 ruling, which Google had been appealing, but the court upheld the decision. Google said it was disappointed but has since made changes to comply. This double blow signals a strong stance by the European Commission in its efforts to curb big tech companies' influence and enforce tighter regulations on tax compliance and market practices. What’s Next? The ECJ ruling signals the end of Apple's legal options in this case, and Ireland will now begin the process of recovering the unpaid taxes from the tech giant. However, the Irish government has downplayed the significance of the ruling, calling it of "historical relevance only." The case has drawn attention to the broader issue of corporate tax avoidance, with critics calling for more robust and transparent tax laws. Tove Maria Ryding of the European Network on Debt and Development stressed the need for "a fundamental reform" of the global tax system, adding that "our tax problem is more than just one rotten apple." ⚡ Image Credit: GettyImages