LAST UPDATE | 10 Sep 2024

THE COURT OF Justice of the European Union has ruled that Apple must pay €13 billion to Ireland in unpaid taxes, something the Irish government had argued against. 

Eight years since the EU Commission initially found that Ireland had given Apple illegal tax advantages, and after challenges in lower courts, today’s ruling is binding. 

“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 has said.

The Court of Justice of the European Union (CJEU) is the highest court in the EU.

Successive Irish governments, alongside Apple, had argued that the tax was not owed but the EU Commission pressed on with the case. 

The government has noted today’s ruling and has said it will consider the judgement. In a statement this morning it was quick to point out that the ruling is based on historical tax rules, that the Revenue Commission has since changed.

It said: “The Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers. 

“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,” it added.

The Department of Finance will start the processes of taking the funds from the global escrow account.

Tax saga 

Apple headquarters its intellectual property arm in Ireland and sells the rights of the brand to other branches of the business.

The European Commission argued that because the entities are based in Ireland, profits should be taxed through the Irish Revenue Commission. The State had argued against that assertion, saying the European Commission’s case breached the country’s tax sovereignty.

Apple and Ireland won a victory in the long-running case in 2020, when the EU’s General Court annulled the order for Apple to pay the taxes owed – a decision Brussels appealed.

But Apple was dealt a blow in November last year when the top legal adviser of the higher European Court of Justice recommended scrapping that decision, saying it was peppered with legal errors.

Reaction

Sinn Féin’s spokesperson for finance Pearse Doherty said that he believed it was a “colossal mistake” for the Government to decide to fight the European Commission’s original appeal and claimed the dispute came at a time when the State needed the funds.

“When they took this case in 2014 this money – the €13 billion – would have built tens of thousands of social and affordable houses right across the State, it could have transformed our society and it could have prevented a lot of pain that we’re seeing as a result of their policies,” Doherty said.

Speaking at a press conference Margrethe Vestager, the European Commissioner in charge of digital policy and competition, said: “Today is a big win for European citizens and tax justice.”

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She reasoned that when large corporations do not pay their share of taxes, it unfairly impacts the citizens of the country and the EU.

Vestager said: “As I understand now, this is not for us at all and the next thing that will have to happen is that these unpaid taxes that have been in an escrow account will have to be released to the Irish state. What they do with it, is completely up to then.”

Senior government sources have previously described the possibility losing the case to The Journal as a “phenomenal political quagmire”. The sources said it would be unprecedented as to how it would be decided as to who gets what.

Vestager said that she hopes her successor, who is expected to be named next week, will continue to target companies who seem to “dominate” these markets and that the European Commission will have the confidence to take similar cases in the future.

In another victory for the EU Commission at the court today, Google was ordered to pay a fine of €2.4 billion.

The CJEU dismissed an appeal by Google and parent company Alphabet against the fine, levied in 2017 after Brussels found that Google abused its dominant position by favouring its own Google Shopping service in search results.

With reporting from AFP and Muiris O’Cearbhaill