APPLE has been ordered to pay €13bn in unpaid taxes to Ireland in a ruling by the European Court of Justice made today.
In a long-running legal dispute, Ireland had been accused of giving illegal tax benefits to the multinational tech firm by the EU Commission, although the state consistently argued that the tax did not need to be repaid to them.
Today, the Court of Justice ruled that Apple would indeed be required to pay those taxes, which total €13bn (£11nm).
“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover,” the court said in a statement issued this morning.
The ruling relates to incidents in 1991 and 2007, where Ireland issued two tax rulings in favour of two companies in the Apple Group - namely Apple Sales International (ASI) and Apple Operations Europe (AOE).
Both companies were incorporated in Ireland but not tax resident there.
Those tax rulings approved the methods used by ASI and AOE to determine their chargeable profits in Ireland in relation to the trading activity of their respective Irish branches.
In 2016, the EU Commission found that, by excluding from the tax base the profits generated by the use of intellectual property licences held by ASI and AOE, that the head offices of those companies were located outside Ireland and management of those licences depended on decisions taken at the level of the Apple Group in the United States.
As such, it concluded that Ireland’s tax rulings from 1991 to 2014 had given those Apple companies State aid that was “unlawful and incompatible with the internal market, and from which the Apple Group as a whole had benefited”.
The Commission then ordered Ireland to recover the aid, which were worth €13bn to Apple.
In 2020, in actions brought before the Commission by Ireland and by ASI and AOE, the General Court annulled the Commission’s decision.
Today’s ruling saw the that verdict set aside by the higher court, which said it contained legal errors.
This means Ireland will have to recover the lost taxes from Apple.
"This case has never been about how much tax we pay, but which government we are required to pay it to,” the tech giant, which released its new iPhone 16 range yesterday, said following the ruling.
“We always pay all the taxes we owe wherever we operate and there has never been a special deal.”
They added: "Apple is proud to be an engine of growth and innovation across Europe and around the world, and to consistently be one of the largest taxpayers in the world,"
"The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US.
"We are disappointed with today’s decision as previously the General Court reviewed the facts and categorically annulled this case."
Responding to the ruling, the Irish Government said it had "noted" the court's statements and would "consider the judgment carefully".
"The Government of Ireland has today (Tuesday) noted the statements in relation to the judgment from the Court of Justice of the European Union (CJEU) that did not find in favour of Ireland’s arguments in the Apple State aid case. We will consider the judgment carefully when it is circulated," they confirmed in a statement.
"The Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers," they explained.
"The CJEU has found that the tax paid was insufficient and that a greater amount of taxation was required to be recovered. Ireland will of course respect the findings of the Court regarding the tax due in this case."
They added: "Today’s judgment provides the final determination in this case and the process of transferring the assets in the Escrow Fund to Ireland will now commence in the manner prescribed in the Deed governing the operations of the Escrow Fund.
"The Apple case involved an issue that is now of historical relevance only; the Revenue opinions date back to 1991 and 2007 and are no longer in force; and Ireland has already introduced changes to the law regarding corporate residence rules and the attribution of profits to branches of non-resident companies operating in the State.
"Ireland is an active participant in international tax discussions and has also made necessary changes to its taxation regime as international tax rules have developed over time."
