The long dispute between Apple, the European Union and Ireland seems to have reached a decisive point. The Court of Justice of the European Union has overturned the ruling of the General Court, thus confirming the decision of the European Commission: Apple to repay €13 billion to Ireland, considered illegal state aid.
The legal affair
In 2020, the General Court of the EU annulled the European Commission’s decision, arguing that there was insufficient evidence to prove that Apple had benefited from favorable tax treatment by Ireland. However, with the new verdict, the Court of Justice decided to support the Commission’s argument, giving the green light to the recovery of the 13 billion euros.
Ireland, which had supported Apple in the appeal process, accepted the ruling, saying it respected the court’s judgment and was prepared to recover the amount awarded.
Apple expressed its disappointment in a statement: “We are disappointed by today’s decision, as the General Court reviewed the facts and categorically overturned the case. There was never any special treatment,” the Cupertino company added.
The European Commission’s reaction
Margrethe Vestager, the European Union’s Competition Commissioner, called the ruling a major victory for European citizens and for tax justice. The case, in fact, has its roots in 2016, when after three years of investigation the European Commission discovered that Apple had paid between 0.005% and 1% in taxes in Ireland from 2003 to 2014, compared to the normal corporate tax rate of 12.5%.
Vestager had explained that Apple had created a complex structure through its Irish subsidiariesattributing most of the profits to “head offices” that existed only on paper, with no real operations. These profits were not taxed in Ireland or elsewhere. In 2011, for example, one of Apple’s Irish subsidiaries declared profits of €16 billion, but only €50 million of this was taxed in Ireland, at an effective rate of 0.05%.
At the time, Apple CEO Tim Cook called the allegations “pure politics” and disputed the 0.005% tax rate as a “false number.”
Today, the Irish government said that tax laws governing profits attributed to branches of non-resident companies have been changed. This means that the tax treatment that Apple enjoyed is no longer possible under the current rules.
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Source: www.iphoneitalia.com
