Some great news for Apple this morning, Apple and Ireland have won their multi-billion European tax appeal in the most recent court case.
The EU regulators had ruled that Apple had to pay €14 billion to Ireland, as they had accused Ireland of giving Apple preferential tax treatment. The €14 billion payment was made last year.
The judges in the case have ruled that Ireland did not give Apple preferential tax treatment over other companies and this is why the original ruling has been overturned. You can see a tweet from the court below.
#EUGeneralCourt annuls the decision taken by the @EU_Commission regarding the Irish #TaxRulings in favour of @Apple #Apple #EUCommission #StateAid pic.twitter.com/KoF6r1n82S
— EU Court of Justice (@EUCourtPress) July 15, 2020
Background of the Case
The case dates back to 2016 when the European Commission concluded that Ireland had granted undue tax benefits to Apple, allowing the tech giant to pay substantially less tax than other businesses. This decision was part of a broader EU crackdown on what it sees as unfair tax practices by multinational corporations. The €14 billion sum, which includes interest, was one of the largest tax penalties ever imposed by the EU.
Apple and Ireland both contested the ruling, arguing that the tax arrangements were in line with Irish and EU law. They claimed that the European Commission had misinterpreted the facts and misapplied state aid rules. The General Court’s decision to annul the Commission’s ruling is a significant victory for both Apple and Ireland, as it supports their stance that no special treatment was given.
Implications of the Ruling
The ruling has far-reaching implications for both the tech industry and EU tax policy. For Apple, it means the company can avoid a substantial financial hit and continue its operations in Ireland without the looming threat of additional tax liabilities. For Ireland, the decision is a validation of its tax policies, which have been a cornerstone of its strategy to attract foreign investment.
However, this may not be the end of the matter. The European Commission has the option to appeal the General Court’s decision to the European Court of Justice, the EU’s highest court. If an appeal is lodged, it could prolong the legal battle for several more years. The Commission has already indicated that it will carefully study the judgment and consider its next steps.
The case also highlights the ongoing tension between national tax policies and EU regulations. While countries like Ireland use favorable tax regimes to attract multinational companies, the EU is increasingly focused on ensuring fair competition and preventing tax avoidance. This ruling could influence future cases and shape the EU’s approach to state aid and tax policy.
Of course, this may not be the end of the matter and it could possibly be appealed by the EU, it will be interesting to see what happens.
Source Engadget
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