Apple and Ireland have won their appeal against the European Commission over a 13 billion euro (£11.6 billion) tax bill.
The General Court in Luxembourg annulled the decision taken by the commission over Irish tax rulings in favour of the tech giant. The commission previously said the tech giant paid an effective corporate tax rate of just 1% on profits from sales made across the EU by routing them through a firm based in Ireland. The commission said this constituted illegal aid given to Apple by the Irish state.
The case dates back to August 2016, when the European Commission ordered Ireland to recover up to 13,000 million euros, plus interest, on taxes not paid by Apple between 2003 and 2014. The decision on the North American multinational, after three years of investigation, angered the Barack Obama government, which warned of possible retaliation for what they consider to be an openly hostile policy against the country’s firms. He angered the multinational and the Irish Government itself, which has always maintained that the numbers are in order and there is nothing to collect.
The Commission can appeal the General Court’s decision to the European Court of Justice. The appeal must be made within the next two months and ten days. The 13.1 billion euro is being held in an escrow account, meaning the proceeds cannot be released until there has been a final determination in the European courts over the validity of the commission’s decision.
Ireland’s open economy is based on low corporate taxation and other incentives to attract multinationals. In Apple’s case, it was significantly below the standard 12.5% imposed on corporations.