Apple bagged a major victory in a case appealed by the European Union Commission in 2016, overturning an order that required the Silicon Valley giant to pay 13 billion euros (almost $15 billion) in taxes back to the Irish government for engaging in antitrust activities.
The EU Commission had ruled Apple to pay $15bn to Irish government in taxes – after announcing that Ireland had granted illegal tax benefits to the firm in the period 2004-2014. However, the state of Ireland argued against the commission and simply affirmed that there was no violation of Irish tax laws, announcing that they would appeal against the order. Tim Cook, CEO of Apple in 2016 confirmed that the firm would appeal as well.
EU claims that Apple has been running under two subsidiaries in Ireland – Apple Sales International (ASI) and Apple Operations Europe (AOE), that were given huge benefits from the country.
In the second quarter of 2018, Apple had transferred an amount of $15bn to an escrow account. In October 2018, the Commission announced that it would drop its legal action against Ireland for failure to recover the amount owed by the deadline laid down in the Commission decision (the deadline was 3 January 2017). Following which, in 2019, the finance department officials of Ireland claimed that it cost EUR 7.1mn in legal fees for defending Apple.
“The General Court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU1,” judges said, referring to EU competition rules. The court order added, “According to the General Court, the Commision was wrong to declare the ASI and AOE had been granted a selective economic and, by extension, State aid.”
The whole court order is available to read here:
— EU Court of Justice (@EUCourtPress) July 15, 2020
Margrethe Vestager, the Executive Vice-President of the European Commission, said the Commission would “carefully study the judgment and reflect on possible next steps.”
“The Commission stands fully behind the objective that all companies should pay their fair share of tax,” said Vestager in a statement. “If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU.”