Apple’s long legal saga, grappling with European taxation, has ended with a definitive ruling that has cornered the Cupertino giant. In 2020, the EU General Court had annulled the European Commission’s decision that condemned the company to pay a very high fine. The Court of Justice of the European Union has once again overturned the situation: Apple found guilty of having received state aid and will therefore have to compensate Ireland with a whopping 13 billion euros.
But what is Apple guilty of and why will it have to “return” all this money? Let’s try to find out together.
Apple and “State Aid”
Back in 2016, the European Commission ruled that between 1991 and 2014, Apple received tax benefits from Ireland in the form of favorable taxation that could be considered “state aid.”
In 2020, however, the EU General Court intervened in favor of the American giant, arguing that there was insufficient evidence to support the accusation and that the Commission had not demonstrated the particular nature of such aid and the consequent exclusivity of these in favor of Apple.
However, the Court of Justice has once again overturned the decision of the General Court, as is expressly stated in the final judgment: “On appeal, the Court of Justice overturns the judgment of the General Court and issues a final judgment on the matter, confirming the Commission’s claims.“.
The profits in question were recorded by two Apple group companies, Apple Sales International and Apple Operations Europe, both incorporated in Ireland but with a de facto foreign tax domicile. Two Irish court rulings had allowed Apple to exclude from its tax base the profits generated by the licensing of the companies’ intellectual property, precisely because of their tax residence outside of Ireland.
This system, which provided for the existence of two companies with different tax regimes (it was called “double Irish”), was reformed in 2016 following pressure from the EU.
The final verdict forces Apple to pay 13 billion euros to IrelandThe response from the bitten apple was not long in coming: “The European Commission is trying to retroactively change the rules and ignores that, as required by international tax law, our revenues have already been taxed in the United States.“.
Meanwhile, Apple has presented its new range of products, including the new iPhone 16.
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