Apple Inc. has lost its court battle over a €13 billion ($14.4 billion) Irish tax bill, marking a significant victory for the European Union’s efforts to address preferential tax arrangements for large corporations.
The European Union’s Court of Justice in Luxembourg upheld a landmark 2016 decision that Ireland violated state aid laws by providing Apple with an unfair tax advantage, according to TIME.
On Tuesday, the court overturned a previous lower court ruling in favour of Apple, stating that the lower court had erroneously found faults in the European Commission’s assessment.
The decision is a notable success for E.U. antitrust chief, Margrethe Vestager, who is nearing the end of her two-term mandate in Brussels.
In 2016, Vestager drew international attention by challenging Apple’s tax practices, alleging that Ireland’s tax arrangements granted illegal benefits to the tech giant, allowing it to pay significantly less tax compared to other businesses in the country.
Vestager had ordered Ireland to recover the €13 billion from Apple, an amount equivalent to approximately half of Apple’s global Mac sales over two quarters. The funds have remained in an escrow account awaiting the final ruling.
“We are disappointed with today’s decision as previously the general court reviewed the facts and categorically annulled this case,” an Apple spokesperson said.
While the ruling represents a setback for Ireland, which had argued that it did not offer any special tax advantages to Apple or other tech companies, the prolonged duration of the case is unlikely to significantly impact Ireland’s status as a key hub for the European headquarters of numerous major tech firms.
The country remains a well-established location for global tech giants despite this decision.
The Chief Executive Officer of Apple, Tim Cook previously blasted the E.U. move as “total political crap.”
The U.S. Treasury has also weighed in, saying that the E.U. was making itself a “supra-national tax authority” that could threaten global tax reform efforts.
Then President Donald Trump said Vestager “hates the United States” because “she’s suing all our companies.”
The Apple decision stands out as the most significant case in Margrethe Vestager’s decade-long campaign for tax fairness, which has also included investigations into companies such as Amazon.com Inc. and Stellantis NV’s Fiat.
Vestager has consistently argued that selective tax benefits granted to large corporations constitute illegal state aid, which is prohibited under E.U. law.
