Apple wins $15B EU tax case

Apple wins $15B EU tax case
© HECTOR RETAMAL/AFP via Getty Images

A European Union court on Wednesday ruled Apple does not have to pay nearly $15 billion in back taxes to Ireland.

In 2016, the European Commission alleged the tech giant had paid minuscule tax rates through an illegal deal with the Irish government and owed 13 billion euros, saying it underreported its European profits for more than a decade using two Irish shell companies.

However, the EU’s General Court ruled Wednesday the Commission “did not succeed in showing to the requisite legal standard that there was an advantage,” according to a press release from the court.

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The EU’s second-highest court called the Commission “wrong” in its declaration that the company “had been granted a selective economic advantage and, by extension, state aid.” 

The Irish government and Apple both said they welcomed the ruling. Apple CEO Tim Cook previously called the case “total political crap.”

A bipartisan group of lawmakers in the United States have sided with the Cupertino, Calif., company in the dispute and have previously criticized the European Commission's finding in 2016. 

Commission Vice President Margrethe Vestager said she is analyzing the ruling to “reflect on possible next steps.”

"The Commission will continue to look at aggressive tax planning measures under EU state aid rules to assess whether they result in illegal state aid,” Vestager said, according to The Associated Press

Sven Giegold, a member of the European Parliament from Germany, called the ruling a “huge setback” in efforts to end agreements for low tax rates between multinational corporations and member nations.

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“EU state aid rules are clearly totally insufficient to tackle the problem,” he said, according to the AP. “This must be a wakeup call.”

Tax revenue is particularly vital to EU nations during the coronavirus pandemic, which has sent economic shock waves through the global economy.

“In times like these when we are passing multibillion-euro economic stimulus packages, we cannot afford to waste a single cent in tax revenue,” said Markus Ferber, also a member of the European Parliament from Germany, according to the AP. 

Next steps for the suit remain unclear. However, the European Commission could appeal the case to the EU's highest court. 

Updated at 10:05 a.m.