Europe’s top court delivered a significant ruling against Apple on Tuesday, concluding the tech giant’s decade-long legal battle over its tax arrangements in Ireland. The case traces back to 2016 when the European Commission ordered Ireland to recover up to 13 billion euros ($14.4 billion) in back taxes from Apple. The European Court of Justice (ECJ) upheld the Commission’s decision, marking a major setback for the company in its ongoing disputes with the European Union.
Apple shares dropped by about 1% following the ruling, which coincided with the company’s unveiling of new products, including updates to its iPhone, Apple Watch, and AirPod lines.
EU court rules Apple must pay Ireland €13 billion in unpaid taxes after lengthy legal saga https://t.co/jPaz7Bdk9j
— Irish in Europe Voice (@IrishinEurVoice) September 10, 2024
The Irish government responded to the decision, describing the case as “of historical relevance only,” reiterating its stance that it never offered preferential tax treatment to any company. Apple similarly emphasized in a statement that the dispute was not about how much tax was owed, but rather which government was entitled to collect it. The company also announced a one-time tax charge of approximately $10 billion for the fourth fiscal quarter ending on September 28, 2024.
The case stems from a 2016 European Commission ruling that accused Apple of benefiting from “illegal” tax advantages in Ireland for over two decades. The Commission initially demanded that Ireland recover the back taxes. Both Apple and Ireland challenged the decision, and in 2020, the EU General Court sided with Apple, annulling the Commission’s ruling.
However, the Commission appealed, and the ECJ’s ruling on Tuesday overturned the General Court’s decision, reaffirming the Commission’s original verdict. The court’s decision underscores the broader tension between U.S. tech giants and the European Union, which has been focusing on issues such as data protection, taxation, and antitrust concerns.
EU top court rules Apple must pay €13bn in back taxes https://t.co/M1d3aBdjZE
— FT Europe (@ftbrussels) September 10, 2024
Apple has faced several legal battles in the EU, including a 1.8 billion euro antitrust fine in March for allegedly abusing its market dominance in the distribution of music streaming apps. Additionally, the EU’s Digital Markets Act has forced Apple and other tech companies, including Alphabet and Meta, to adjust their business practices across Europe.
Key Points:
i. The European Court of Justice ruled against Apple in a $14.4 billion tax case, affirming the 2016 European Commission decision that ordered Ireland to recover back taxes from the company.
ii. Apple shares fell by about 1% following the ruling, which coincided with the company’s new product announcements.
iii. Apple will incur a one-time tax charge of approximately $10 billion in its fourth fiscal quarter ending September 28, 2024.
iv. The ECJ’s decision overturned a 2020 ruling by the EU General Court that had sided with Apple and Ireland.
v. This case highlights ongoing tensions between U.S. tech giants and the European Union, with Apple also facing other antitrust actions and regulatory changes under the EU’s Digital Markets Act.
Lap Fu Ip – Reprinted with permission of Whatfinger News
