Apple wins court fight over €13bn Irish tax bill

The court said the European Commission failed to prove that Ireland’s tax arrangements with the company were illegal state aid

An EU court ruled in favour of Apple on Wednesday saying the iPhone maker did not have to reimburse Ireland €13 billion in undue tax benefits. AFP  

Apple won its court fight over a record €13 billion ($14.9bn/Dh54.5bn)Irish tax bill in a crushing blow to European Union antitrust chief Margrethe Vestager’s crackdown on preferential fiscal deals for companies.

The EU General Court sided with the iPhone maker, saying the European Commission failed to show Ireland’s tax arrangements with the company were illegal state aid. The decision can be appealed.

The court said the EU’s competition authority “did not succeed in showing to the requisite legal standard that there was an advantage”.

The Apple case is the hallmark of Ms Vestager’s five-year campaign to get rid of allegedly unfair tax deals that some EU governments dole out to favoured multinationals including the likes of Amazon.com. Apple’s fury at its 2016 tax bill led chief executive Tim Cook to blast the EU move.

Apple welcomed Wednesday’s ruling, saying the case “was not about how much tax we pay, but where we are required to pay it”. Its shares rose 2.4 per cent in premarket trading.

The company added that it “has paid more than $100bn in corporate income taxes around the world in the last decade and tens of billions more in other taxes”.

The Irish finance ministry said the nation “has always been clear that there was no special treatment provided to the two Apple” units in the EU’s state-aid case.

The ruling comes as Apple is getting close to overtaking Saudi Arabia’s state-owned oil company in market valuation, a milestone that would make the technology giant the world’s largest company by that measure. Its shares have rallied about 30 per cent this year on broad optimism about its businesses.

Apple’s huge sales -- like those of other US tech giants -- have attracted particular scrutiny in Europe, focusing on complicated company structures for transferring profits generated from intellectual property.

Before today Ms Vestager already had a mixed record in the court cases that followed her tax orders. She suffered a setback last year when judges faulted a decision targeting Starbucks over its tax deals with the Netherlands. But the tribunal upheld the EU’s decision concerning Fiat Chrysler Automobiles’ tax affairs in Luxembourg.

In its challenge, Cupertino, California-based Apple claimed the EU wrongly targeted profits that should be taxed in the US and “retroactively changed the rules” on how global authorities calculate what’s owed to them.