Apple has been ordered to pay €13 billion ($14.4 billion) of back taxes to the Irish state, in a court ruling that ended a decade-long fight between Europe and the big tech company.
In a judgment handed down on Tuesday, the European Court of Justice (ECJ) agreed with a European Commission ruling in 2016, which found that for a period of more than 20 years Apple enjoyed illegal tax advantages that constituted state aid from the Irish government.
“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid, which Ireland is required to recover,” the court said in a statement.
“Today is a huge win for European citizens and tax justice,” Margrethe Vestager, the European competition commissioner, said in a statement on X. “Ireland granted illegal aid to Apple.”
The Irish government said that it will respect the decision of the court, and points to it being of “historical relevance only,” claiming that it dates back to agreements in 1991 and 2007 that are “no longer in force,” because it introduced changes to its tax regime. “The Irish position has always been that Ireland does not give preferential tax treatment to any companies or taxpayers,” the government’s statement read.
Stephen Daly, a reader in tax law at King’s College London, says he is “stunned” by the decision, which has come after a lengthy back-and-forth legal battle that saw the European General Court find in Apple’s favor in 2020.
“I really didn’t see this coming,” Daly says. “I thought the commission’s path to victory was incredibly narrow because it suffered some big defeats in similar cases against Fiat and Amazon. I thought this would be the same outcome. I’m also stunned because this is the biggest tax case in history: €13 billion—which will be more than €14 billion when interest is added on—will have to be paid back.”
The case relates to tax deals the Irish authorities struck with Apple in 1991 and 2007 to encourage it to headquarter two European subsidiaries in the country. Other companies were not offered the same favorable terms, leading the European Commission to accuse Ireland of giving Apple a “selective advantage.”
Ireland has long come under scrutiny for allegedly providing a tax haven for US firms. During his last stint in the White House, current presidential hopeful Donald Trump name-checked the country in a speech in which he vowed to bring “trillions of dollars” in tax revenues back to the US.
“For too long our tax code has incentivized companies to leave our country in search of lower tax rates,” he said in 2017. “It happens—many, many companies. They’re going to Ireland. They’re going all over.”
According to Daly, the ECJ decision is “not good for Ireland.” “Ireland has always tried to position itself as a country that provides generous tax rules but rules that are fair,” he says. “This certainly has harmed Ireland Inc.”
Chiara Putaturo, an EU tax policy adviser at the charity Oxfam, which is engaged in a long-running campaign against tax havens, said the judgment “delivers long-overdue justice after over a decade of Ireland standing by and allowing Apple to dodge taxes,” adding that it “‘exposes EU tax havens’ love affair with multinationals.”
However, Putaturo said that while Ireland will be forced to recover the €13 bllion from Apple, the case has not outlawed the use of so-called “sweetheart tax deals” in the EU. Notably, in the Fiat and Amazon cases, which were decided in 2022 and 2023 respectively, the ECJ ruled that similar deals struck in Luxembourg did not amount to state aid.
“While this ruling will force [Apple] to pay its debt, the root of the issue is far from solved,” she says. “EU tax havens can still make sweetheart tax deals with big multinationals. The duty to stop this rests on the shoulders of EU policymakers. Yet, they have turned a blind eye to tax havens within their borders and the harmful race to the bottom that countries like Ireland are instigating.”
Apple said it was “disappointed” with the decision, adding that it “always pay[s] all the taxes we owe wherever we operate and there has never been a special deal.” “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,” the company’s statement said.
