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Apple has lost a protracted legal battle with the European Union over a €13.0 billion tax claim in Ireland. The dispute began in 2014 when the European Commission launched an investigation into Apple's tax practices in Ireland. The probe led to a 2016 ruling that required Ireland to recover up to €13.0 billion in unpaid taxes from Apple (LSE:0R2V). The Commission contended that Apple had benefited from "illegal" tax advantages provided by Ireland over a period of two decades.
In response to the ruling, both Apple and the Irish government appealed the decision in 2019. The case initially took a favorable turn for Apple when the EU General Court ruled in 2020 to annul the 2016 decision. The General Court's judgment was based on the assertion that the European Commission had failed to demonstrate that the Irish government had granted Apple unfair tax benefits.
However, on Tuesday, the European Court of Justice overturned the General Court's ruling. The higher court upheld the European Commission's original decision from 2016, confirming that Apple had indeed received illegal tax advantages from Ireland. The Court's decision marks a significant defeat for Apple, which had argued that the Commission's attempt to retroactively alter the rules was unjust. Apple maintained that its income was taxed in the United States as per international tax law and that the tax benefits received in Ireland were lawful under the existing agreements.
Following the ruling, Apple’s shares saw a decline of 1.40% in pre-market trading, dropping to $217.81 each as of 1030 BST. This legal setback underscores the ongoing scrutiny and challenges faced by multinational corporations regarding their tax arrangements in different jurisdictions. The case highlights the complexities of international tax law and the tensions between global companies and regulatory bodies over tax practices.
