Ruling is a fillip for the European Commission in its efforts to clamp down on ‘sweetheart’ tax deals
Apple has lost a high profile €13bn (£11bn) Irish tax battle with Brussels in a decision which is a boost to the European Commission’s efforts to clamp down on favourable “sweetheart” tax deals for multinationals.
The European court of justice ruling, which had been eagerly awaited, comes after years of legal wrangling over whether the European Commission was right to demand in 2016 that €13bn in “illegal” tax breaks for Apple should be repaid because it gave the iPhone maker an unfair advantage.
The ECJ ruled that a lower court win for Apple should be overturned and backed the commission’s 2016 decision that Ireland had granted Apple unlawful aid relating to the tax treatment of profits generated by Apple’s activities outside the US which Ireland is now required to recover.
In 2020, the general court, a lower court, annulled the commission’s 2016 decision, saying it had not sufficiently established that Apple’s subsidiaries had enjoyed a selective advantage. That ruling has now been set aside by the ECJ, which has confirmed the commission’s 2016 decision.
The ruling is a victory for Margrethe Vestager, the EU competition chief, who concluded in 2016 that the iPhone maker had benefited from billions worth of unfair tax breaks from the Irish government.
Vestager, who is due to step down later this year, has been seen as a tough enforcer willing to take on powerful multinationals such as Fiat, Amazon and Starbucks over their tax bills.
