Apple Must Pay $14.4 Billion After EU Court Ruling on Tax Benefits
Apple is set to pay a hefty sum of 13 billion euros ($14.4 billion) following a decisive ruling by the Court of Justice of the European Union (CJEU) on Tuesday. The court has overturned a previous lower court decision and ruled in favor of the European Commission’s 2016 judgment that Apple benefited from illegal tax advantages in Ireland.
The European Commission initially determined that Apple had received preferential tax treatment from Ireland, which allowed the tech giant to avoid paying taxes on a substantial portion of its profits. Specifically, the Commission argued that Apple’s use of intellectual property held by its Irish subsidiaries in global sales should have been reflected in the Irish tax base.
In response to this judgment, the Commission ordered Apple to repay 13 billion euros in back taxes. However, a 2020 appeal court decision challenged this, suggesting the Commission had not adequately demonstrated that Apple had received a “selective advantage” from the tax rulings.
Tuesday’s ruling by the CJEU, however, countered this argument. The court criticized the previous lower court’s “erroneous assessments” of tax law and supported the Commission’s stance that Apple had indeed benefited unfairly from the Irish tax arrangements.
The ruling comes on the heels of Apple’s recent product launch event, where the company introduced its latest iPhones and Apple Watches. Apple expressed disappointment in the decision but has not provided further comment.
Following the ruling, Apple’s stock was marginally lower at $219.30 before the market opened, although it has seen a 14% increase in value this year.
The decision underscores the ongoing scrutiny of multinational companies’ tax practices and their impact on European tax authorities’ efforts to enforce fair taxation.
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