Apple has suffered a significant defeat after the EU’s top court ruled that the iPhone maker must pay €13bn in back taxes, overturning an earlier decision in the Big Tech group’s favour.
The ruling relates to a 2016 case when the EU’s competition chief Margrethe Vestager said that Ireland had given the company an illegal sweetheart deal, amounting to a tax rate of less than 1 per cent.
The European Court of Justice said on Tuesday its ruling “confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover”.
A lower court had in 2020 quashed the commission’s order and the ECJ’s decision to overturn that ruling was unexpectedly decisive.
Apple chief executive Tim Cook has previously dismissed the commission’s position as “total political crap”. On Tuesday the company said the EU was “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 case has been watched carefully across the bloc as a watershed moment over Big Tech’s tax affairs in Europe.