Apple Wins Case Against European Commission

By Avi Ben Ezra Saturday, August 15, 2020

Apple has won its $14.9 billion criminal tax case over with the European Commission (EC) in the ruling by the general court in the European Union (EU).

The EC had claimed that the renowned multinational technology company received illegal aid from Ireland for 20 years, (i.e., lowered tax rates and ultimately paying under 1% in corporate taxes) that were not available to any other company. Along with the Irish government, Apple refuted the claim, stating that the ruling made was against all logic.

Ireland: Home to Many Major Companies

With one of the lowest corporate tax regimes in Europe, Ireland is home to companies like Facebook and Google. The country joined forces with Apple to contend with the EC over its claim.

The Irish government also added that it did not give Apple any preference over other companies in terms of tax payments. Apple was charged the normal amount of tax percentage per normal Irish taxation rules.

Decision Annulled

On July 15, the General Court judges annulled the decision that prompted Apple to pay $14.9 billion in taxes back to the Irish Government.

Some critics were of the view that Ireland would be at a disadvantage, with Apple’s dispute with the EC concerning taxation regardless of the Irish government in an agreement with Apple in the appeal. Although Ireland’s funds would have profited from Apple’s $14.9 billion input, the country still used its low-tax system to its benefit. Experts believe that the administration will be chastised by parties in opposition to them over its decisions to side with Apple and not accept the cash.

Apple Elated Over Ruling

After the ruling, the spokesperson for Apple expressed that the company was pleased with the ruling, stating that the EC was never concerned about the tax they paid, but where the company was paying it. In a statement released by the company, Apple claimed that it had paid tens of billions in several taxes and over $100 billion in corporate income taxes in various parts of the world in the past ten years.

The primary antitrust official Margrethe Vestager has vowed that the Commission would not stop their fight against illegal state aid. However, she said she was perusing the court’s judgment to decide on the Commission’s next action point. The Apple tax case was the most major self-contained penalty in Vestager’s area of expertise, having imposed an upwards of $10 billion in penalties thrice over the last ten years against global tech giant Google.

The Statement From the Commission

In a statement released on behalf of the Commission, Vestager said they had made giant strides on a global, European, and national level. She expressed that what was needed to achieve greater success is ensuring that proper legislation and adjustment of corporate philosophies work smoothly with the enforcement of state aid.

Brussels had also accused Ireland of having discrepancies in their tax treatment of international companies and placed charges on the country for not applying equal rules when taxing foreign groups.

Last year, the EC’s lower court annulled a ruling that required Starbucks to pay 30 million euros in Dutch back taxes. The court also annulled a decision against a Belgian tax regime for thirty-nine multinational firms.

Beyond all doubts, the court ruling is a significant hit to the Commission and its mission to call out corporations and countries it believes to be engaged in illegal tax deals in Europe.

The Finance Ministry of Ireland stated that, until all European legal proceedings reach an end, they will not be releasing any funds from the deposit account that holds all the money paid by Apple.

Reactions to the Ruling

The ruling received a mixed reception in the state of Washington. Where legislators, of late, were seen criticizing the digital facilities' taxation plans of numerous countries. They also argued that companies based in the US, like Apple, received unfair treatment in this case.

Senator Chuck Grassley claimed to be pleased with the ruling saying that the EC did not apply the law correctly regarding asserting taxing rights and, in hindsight, evaluating taxes in the billions. From indications, the EC will likely appeal this decision at the European Court of Justice.

About the Author

Avi Ben Ezra

Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

Related Articles