Apple must $14.4 billion in back taxes The letter was sent to the Irish government after the EU's top court rejected the iPhone maker's appeal against a landmark 2016 ruling – which CEO Tim Cook denounced at the time as “complete political nonsense”.
The Luxembourg-based European Court of Justice on Tuesday upheld the European Commission's ruling that Ireland had violated state-aid law by giving Apple an unfair advantage.
“We are disappointed by today's decision, as the General Court previously reviewed the facts and clearly dismissed the case,” an Apple spokesperson said.
The company said the decision would result in it paying a one-time income tax penalty of up to $10 billion in the fourth quarter ending Sept. 28.
Apple shares fell less than 1% after the opening bell.
In 2016, the European Commission, which is the executive branch of the European Union, determined that Apple gets special tax deals from Ireland The government permitted the company to establish its “head office” in Cork – even though the office existed only on paper and It had no employees or actual operations.
The agreement with Ireland allowed Apple to pay an effective tax rate as low as 0.005% on its European profits in some years.
In 2016, the Commission demanded that Ireland recover unpaid taxes and interest from 2003 to 2014.
Both Ireland and Apple appealed this decision. The appeals court sided with both sides and overturned the initial decision, stating that the commission failed to meet the legal threshold to prove that Ireland was seeking to grant Apple special treatment.
However, the High Court overturned the decision on Tuesday.
“Today is a huge victory for European citizens and for tax justice,” said Margrethe Vestager, the EU’s top anti-competition regulator.
Apple issued a statement expressing disappointment with the decision.
“This matter was never about how much tax we pay, but about which government we have to pay tax to.” A company representative told The Wall Street Journal.
“We have always paid all taxes wherever we operate and have never had any special deals.”
Ireland It has long stood out among its EU partners As one of these The continent's most business-friendly countries This is thanks to the historically low corporate tax rate.
Google, Meta, Microsoft, Amazon, Intel and LinkedIn are among the technology companies that have set up operations in Ireland due to its loose tax environment.
In the wake of the decision, Irish authorities said they would soon begin transferring $14.4 billion in funds to the government treasury, which are currently held in escrow accounts.
While Ireland denied granting any companies special tax privileges, the government said it would respect the court's ruling.
The EU's top court also upheld a $2.67 billion fine imposed on Google by competition authorities who had accused the technology giant of anti-competitive behaviour relating to the way it fares comparison shopping services in search results.
