Apple loses final appeal to avoid paying $14 billion in back taxes

Apple on Tuesday lost its final appeal in its dispute with the European Union (EU) at the EU’s highest court demanding it pay Ireland $14.34 billion (€13 billion) in back taxes.

The case stemmed from an eight-year dispute with the EU that centred on favourable deals offered by Ireland that allowed Apple to pay virtually no taxes across the European Union for 11 years.

In a press release announcing its decision on Tuesday, the European Court of Justice said its ruling “confirms the 2016 decision of the European Commission: Ireland has granted unlawful aid to Apple, which Ireland must recover.”

European Antitrust Commissioner Margrethe Vestager, who led the prosecution against Apple, accused the company in 2016 of striking an illegal tax deal with Irish authorities to pay exceptionally low rates, adding that through the deals Apple paid almost nothing in taxes when instead it “should have paid €13 billion in taxes on all related profits in Ireland.”

The 2016 decision found that Ireland granted Apple unlawful tax benefits between 2003 and 2014. Apple’s tax rate during that period fell from 1% to 0.005%, according to EU officials. Apple disputes that figure.

However, the General Court of the European Union disagreed with the 2016 decision in its 2020 ruling, but that ruling was overturned following Tuesday’s ruling.

In response to Tuesday’s decision, Vestager called it “a great victory for European citizens and for tax justice.”

“I prepared myself for a stiff face, facing a possible defeat. But, you know, it was a victory that made me cry. Because it is very important to show European taxpayers that tax justice can be done from time to time,” Vestager said.

Apple has consistently denied it received any special treatment from Ireland. A spokesman reiterated that and its disappointment with the ruling in a statement Tuesday.

“We are disappointed with today’s decision because the Supreme Court previously reviewed the facts and categorically invalidated this case,” Apple said in a statement. “There was never a special agreement.”

Newsweek reached out to Apple via email on Tuesday seeking further comment.

Meanwhile, the Irish government, which had opposed the Commission’s findings, said it would comply with the ruling but maintained that Ireland does not offer preferential tax treatment to any company. Interestingly, Ireland’s corporate tax policy has changed since the disputed agreement was reached.

The landmark decision is a reminder that large multinationals, particularly in the technology sector, remain under the microscope of EU regulators. Vestager said the ruling shows “taxpayers that there can be justice” and “has shown large companies that they are not above the law when it comes to taxation.”