“Ireland granted Apple unlawful aid which Ireland is required to recover”, the Court of Justice said in a statement, giving a “final judgment” in the matter.
It’s one of a pair of victories today in Brussels’ battle against big tech, as Google lost a separate appeal against a €2.4bn EU fine for favouring its own services — bookending the career of Margrethe Vestager, whose double term as EU antitrust chief ends in a couple of months.
The Commission’s victory means Apple must pay as much as €13bn — or potentially more, with interest and costs — to the Irish Treasury.
The Commission’s initial finding, now confirmed, came after the LuxLeaks revelations of tax rulings which implicated Jean-Claude Juncker, the former Luxembourg leader who was at the time president of the EU executive.
Vestager’s action against big — and largely American — multinationals such as Starbucks, Fiat Chrysler and Amazon saw her badged by then-President Donald Trump as the EU’s “tax lady” who “really hates the USA”.
The case represented an unusual, and controversial, foray by Brussels into tax policy — which is normally set by national capitals, with the EU only intervening if tax breaks distort the bloc’s internal market.
The legal case hinged on how the iPhone maker treated intellectual property income in its books — and whether the Commission was right to say those corporate profits should have been allocated to its European base in Ireland.
The EU’s General Court found against the Commission in 2020, but, in an opinion prepared for the Court of Justice last November, Advocate General Giovanni Pitruzzella questioned the legal reasoning of the lower-tier tribunal.
In financial terms, it represents the largest case of the EU’s tax campaign, which otherwise hasn’t found a huge success in the courts.
The Commission lost legal challenges involving McDonald’s, Starbucks and Engie, though in a recent interview with Euronews’ Radio Schumann podcast, Vestager argued her crusade had nonetheless led to a series of national and international tax reforms.
Despite the billions it stood to gain, the Irish government opposed the Commission’s case; the country has become the European hub for a number of US tech companies.
Michael McGrath previously defended the company as Ireland’s finance minister — and is now himself due to move to Brussels to be European Commissioner, with his portfolio set to be announced by President Ursula von der Leyen shortly.
In remarks to reporters, Vestager said the ruling was a “big win” for EU citizens, the bloc’s single market, and tax justice — and that her campaign also had an indirect impact.
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“Our investigations have decisively contributed to a mind shift, a change of attitudes among Member States” in which practices like Apple’s could no longer occur, she said, citing regulatory and legislative reforms at national, European and global level.
“We now have now learned from the court” about the limits of EU tax action, following the mixed bag of legal cases, Vestager said — with caselaw clarifying that Brussels can check national capitals follow their own rules.
For MEP Pasquale Tridico (Italy, Left), who chairs the European Parliament’s tax Committee, the judgment is “historic”.
“We now expect the future European Commission to propose legislation that bans all forms of tax avoidance and competitive advantages for tech giants and large corporations within the European Union,” Tridico said in a statement, adding: “Our fight for tax justice will go on, stronger than ever”.
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In a statement, the Irish finance ministry said it “will of course respect the findings of the Court regarding the tax due in this case … Ireland does not give preferential tax treatment to any companies or taxpayers.”
The disputed tax rulings are no longer in force, and Ireland has in any case since reformed how it allocates profits for non-resident companies, the statement said.
Billions in unpaid taxes that Apple had placed in trust, pending resolution of the case, will now begin to be transferred to the Irish state, the statement added.
In a separate statement, Apple said it was “disappointed” with the judges’ decision.
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“We always pay all the taxes we owe wherever we operate and there has never been a special deal,” a company spokesperson, adding that it is one of the largest taxpayers in the world.
“The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US,” added the company, which argues it has already paid $20 bn (€18bn) in US taxes on the same profits.
But the ruling has already been hailed by tax activists who have long called for the closing of what they see as corporate tax loopholes.
“This ruling exposes EU tax havens’ love affair with multinationals,” said Chiara Putaturo, EU tax expert for the charity Oxfam, said in a statement. “It delivers long-overdue justice after over a decade of Ireland standing by and allowing Apple to dodge taxes.”
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UPDATE (10 September, 13:00):Adds comments from Vestager and Tridico. 16:40: Adds statement from the Irish finance ministry.
Source link : https://www.euronews.com/my-europe/2024/09/10/apple-ireland-lose-13bn-sweetheart-tax-deal-case-in-victory-for-eus-tax-lady
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Publish date : 2024-09-10 07:00:00
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