The European Court of Justice (ECJ) has asked Apple to pay $14 billion in unpaid taxes to Ireland, in a ruling dating back to 2016. The global tech giant had been accused of using mechanisms that helped reduce its Irish tax bill. The interesting twist is that the Irish government doesn’t actually want the fine to be paid, and has fought a long legal battle to avoid any recovery processes.
Back in 2016, the European Commission had decided in a ruling that Ireland had given Apple certain tax advantages, something that other companies could not benefit from. The tax arrangements between Ireland and Apple were therefore ruled to be illegal. But Ireland appealed against the Commission’s decision, and the decision was overturned by the lower court of the ECJ in 2020.
But the higher court has now upheld the Commission’s original decision from 2016 and has asked Apple to pay the taxes it owes to Ireland. It has also said the lower court’s decision in 2020, which had relieved Apple from paying the unpaid tax, had legal errors.
Court’s final judgement
“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover,” the court said.
Apple has responded by saying, “EU was “trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US”, as reported by the Financial Times.
According to the BBC: “The decision covered the period from 1991 to 2014, and related to the way in which profits generated by two Apple subsidiaries based in Ireland were treated for tax purposes.”
The ruling now requires the Irish government to recover the $14 billion of unpaid taxes from Apple, something it has avoided doing for the last eight years.
The decision is the latest in a long series of legal battles between global tech giants and the EU, with the block having lost similar legal battles against the likes of Amazon and Starbucks in the past.
The news comes a day after Apple released its much-anticipated range of iPhone 16s.