Apple wins £11.8 billion tax case over the EU

Apple has won an appeal against a €13bn (£11.8bn) tax charge from the European Commission.

EU lawmakers have been deliberating over the tech giant’s Irish back taxes payments for ten months.

Initially the European Commission said Apple benefited from illegal state aid via two Irish tax rulings that artificially reduced its tax burden for over two decades – to as low as 0.005% in 2014.

However, the tech giant and Ireland itself launched an appeal that was upheld by Europe’s second-highest court, the General Court.

‘The General Court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU1,’ judges said, referring to EU competition rules.

While 14 billion euros – including interest – would have gone a long way to plugging the coronavirus-shaped hole in Ireland’s finances, Dublin appealed against the Commission’s order alongside Apple because it wanted to protect a low tax regime that has attracted 250,000 multinational employers.

‘Ireland has always been clear that there was no special treatment provided to the two Apple companies. The correct amount … was charged in line with normal Irish taxation rules,’ the finance ministry said in a statement.

However, the government is likely to face strong criticism from opposition parties for not taking the cash, which could cover at least half of a budget deficit forecast to balloon to as much as 10% of GDP this year.

The defeated side can appeal on points of law to the EU Court of Justice, Europe’s highest court.

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