Apple must pay €14.1 billion to Ireland in ‘final judgement’ decision
Technology firm Apple must pay €14.1 billion to the Irish Government after the company lost a European court appeal of the European Commission’s ruling that it received unlawful state aid in Ireland.
On 10 September 2024, the Court of Justice of the European Union found that two Irish subsidiaries of Apple received unlawful state aid from the Irish Government. As a result, the company will now be forced to pay a €13.1 billion back-tax bill to the State, in addition to interest payments of just over €1 billion.
“Ireland granted Apple unlawful aid which Ireland is required to recover,” the European Court of Justice says, further stating that this ruling is the “final judgement in the matter”.
The Court of Justice’s ruling reaffirms a 2016 ruling that Apple had underpaid its taxes to the Irish Government by €13.1 billion for financial years between 2003 and 2014. The tech firm appealed this decision in September 2019 in a bid to the lower General Court of the European Union, the result of which was a verdict reached by the general court in July 2020 to annul the initial ruling.
However, the following September, the Commission announced it would appeal this decision by the lower court, with Commissioner Margrethe Vestager, the Commission’s ‘competition czar’, asserting at the time that the “General Court has made a number of errors of law”.
Vestager had made fair competition a priority agenda item for her, with the Commission having pursued cases against both Ireland and Luxembourg under the assertion that they offer favourable tax treatment to multinational firms in order to acquire the international headquarters of these companies.
The September 2024 ruling was focused on how two units of Apple were taxed in Ireland for handling intellectual property licences for its sales outside of North America. Although the General Court stated in 2020 that the Commission was incorrect to say that these units had been given “selective advantage”, although they had been given different tax terms by the Irish Government to other companies, which the 2024 ruling affirms is against state aid rules.
In spite of Minister for Finance Jack Chambers TD asserting that the ruling “will not impact on the parameters already set for Budget 2025”, it would appear that the tax windfall was an enabler of the Government’s high-spending budget.
