The European Commission has scored a major legal victory against Apple, with the US tech giant now being ordered to pay €13 billion in back taxes.
The European Union’s top court has overturned a lower court ruling that overturned the commission’s conclusion that Apple had benefited from billions of euros in unfair tax breaks from the Irish government.
“Ireland granted Apple illegal aid, which Ireland must recover,” the court said Tuesday, stressing that its ruling is “final on the matter.”
It is a huge victory for Competition Commissioner Margaret Vestager with the main target being US multinationals, as previous similar cases had failed in European Union courts.
The Apple case was part of a series of investigations into how countries such as Ireland and Luxembourg offered favourable tax treatment to secure European headquarters of multinationals on their territory.
Today’s ruling focuses on how two of the tech giant’s units were taxed in Ireland for handling intellectual property licenses for the company’s sales outside North America.
The 2020 court ruled that the commission was wrong to say that the units in question had been given a “selective advantage,” essentially a tax advantage not offered to others and thus unfair state aid.
Apple’s dispute with the EU has now widened, with the company being fined €1.8 billion earlier this year over app store rules. It now also faces three investigations into its non-compliance with digital competition rules.
Vestager said in June that Apple leaves a “sad aftertaste of illegal behaviour”. The tax case alone “shows that Apple contributes very, very little when it comes to taxes,” she said.
