Many today are speaking of a historic decision. The Court of Justice of the European Union has in fact decided that Apple Must Pay €13 Billion in Unpaid Tax in Ireland from 2003 to 2013. No tax evasion. In those 10 years the Cupertino giant had benefited from a preferential tax regime which the Luxembourg judges have classified as “illegal aid”.
What happened
The European Court of Justice has confirmed the European Commission's 2016 decision: Ireland granted Apple illegal aid and is therefore required to recover the unpaid amount.
In 2016, Brussels decided that certain companies belonging to the Apple group had benefited, from 1991 to 2014, from tax advantages constituting state aid granted by Ireland. This aid concerned the tax treatment of profits generated by Apple's activities outside the United States. In particular, the EU Commission had deemed illegal the tax agreement by which Apple had established its headquarters in the country, employing more than 5 thousand people, paying in exchange less than 1% tax.
At that point, Apple and Ireland had filed an appealthe General Court of the European Union, the first level of judgment of the European Court of Justice, which had annulled the Community decision, considering that the latter had not sufficiently demonstrated the existence of a selective advantage in favor of such companies.
Today, the European Court of Justice has the case is closed for good, annulling the General Court's ruling and upholding the Commission's decision. Apple will therefore have to pay Dublin 13 billion euros in back taxes.
Vestager: “Google and Apple rulings are a great victory”
The ruling on Apple comes on the same day that the European Court of Justice confirmed the Google fined $2,4 billion for abuse of dominant position. The Competition Commissioner Margrethe Vestager welcomed the two sentences, speaking of "a “great victory” for the EU as for European taxpayers and policies in favour of a level playing field in business and the single market.
Today's two rulings are a significant boost for the European Antitrust, at the end of Vestager's mandate, which not surprisingly indicates that the Court has taken a definitive position on Apple/Ireland and Google Shopping. Regarding the Apple case, Vestager speaks of "a victory for a level playing field in the single market and for tax justice", claiming that not only has the EU put the aggressive tax planning of multinationals under fire, as demonstrated by the fact that these groups "have been brought before parliamentary committees in the United States and the United Kingdom to explain their hidden tax arrangements". "An epochal change was taking place”, concluded Vestager.
And Apple Falls on the Nasdaq
The ruling by the European Court of Justice is also having repercussions on the stock market. On the Nasdaq, Apple shares lost as much as 1,4%, before recovering, but remaining below par.
Cupertino expects to record a one-time income tax charge of up to about $10 billion in its fiscal fourth quarter ending Sept. 28, due to a ruling by the European Court of Justice that the U.S. company’s tax agreements with Ireland were “illegal.”
