Apple must pay Ireland more than $14 billion in back taxes, EU court rules

Apple has lost a fight to reverse a European Union decision that ordered the company to pay 13 billion euros ($14.3 billion) in back taxes to Ireland.

The European Union’s highest court, the Court of Justice of the European Union, has confirmed a 2016 decision by the European Commission that found that Ireland had granted Apple illegal tax benefits of around €13 billion related to the taxation of profits of the Irish branches of two of the tech giant’s subsidiaries.

Also on Tuesday, the European Court of Justice upheld a €2.4 billion ($2.6 billion) antitrust fine imposed on Google, originally in 2017 by the European Commission, for “abusing its dominant position in several national internet search markets by favouring its own comparison shopping service over those of its competitors.”

The judgments of the CJEU are final and cannot be appealed.

The Apple case dates back to August 2016, when the European Commission ruled that Ireland had extended illegal tax benefits to Apple for more than a decade. Ireland was ordered to calculate and recover additional taxes from Apple for the period from June 2003 to December 2014 (a new Irish law eliminated the use of tax opinions from that date in January 2015). Apple won an appeal in a lower court, overturning the decision, but the ECJ on Tuesday upheld the original 2016 decision.

In a statement, an Apple representative said the company was disappointed with the decision. “The European Commission is trying to change the rules retroactively and ignore the fact that our income was already subject to tax in the U.S. under international tax law,” the spokesperson said.

The Irish government said in a statement it would “respect the arrangements” but added: “It has always been Ireland’s position that Ireland does not provide preferential tax treatment to any company or taxpayer.”

EU antitrust chief Margrethe Vestager said in a statement Tuesday: “Today is a huge victory for European citizens and tax justice. The Commission will continue to work on harmful tax competition and aggressive tax planning.”

In an SEC filing Tuesday, Apple said it expects to take a one-time income tax charge for its fiscal fourth quarter (ending September 28) of up to $10 billion, “which will increase the company’s effective tax rate for the quarter.”