Apple Must Pay $14 Billion in Back Taxes to Ireland
Apple has lost its last bid to avoid paying over $14 billion in back taxes to Ireland, with European antitrust Commissioner Margrethe Vestager calling the decision "a big win for European citizens and for tax justice."
For years, Ireland used low taxes to attract big tech companies — including Apple — looking to take advantage of European Union (EU) rules allowing multinationals to pay taxes on the bulk of their European revenue in the one country where they have their regional headquarters.
But in 2016, the EU Commission ordered Apple to pay taxes on its profits across the EU from 2003 to 2014, arguing that Ireland had violated EU rules by essentially giving the company subsidies in an illegal tax deal.
Apple's effective corporate tax rate on its European profits dropped from 1% in 2003 to just 0.005% in 2014, the EU head office said.
But in 2020, the EU's General Court stopped the $14 billion payment, deciding that the Commission was wrong to declare that Apple had been granted "a selective economic advantage."
Then, on September 10, 2024, the European Court of Justice — the EU's top court — overturned the General Court's ruling.
The new ruling "confirms the European Commission's 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover," the top court said.
Vestager said she was stunned by the turnaround. "I had prepared for a stiff upper lip, facing a possible defeat. But, you know, it was a win that made me cry. Because it is very important to show European taxpayers that once in a while, tax justice can be done."
The Commission has also previously targeted Amazon, Starbucks and Fiat with tax rulings, but these were overturned on appeal.
The government in Dublin said that "the Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers." But it added that it would "respect the findings of the Court regarding the tax due in this case."
Both Vestager and the Irish government noted that the country's corporate tax rules have since been changed, so the provisions that allowed Dublin to offer Apple the tax deal no longer exist.
