Apple have successfully overturned an order from the European Commission to pay €14.6bn ($16.7bn) in tax to the Irish government. In a landmark victory, the decision came from judges in the EU’s second highest court who ruled that Brussels had not shown the ‘requisite legal standards’ that the tech company had gained an illegal advantage in Ireland due to its low tax regime.
The decision is considered a blow to politicians within the EU Commission who were seeking to conduct further scrutiny over multinational arrangements for low taxes in member nations. The Commission is designed to ensure that there is a level playing field across the 28 EU member states in regards to business.
The initiative to combat these tax arrangements was spearheaded by EU competition commissioner Margrethe Vestager, who will take this as a further blow following a similar ruling involving Starbucks in 2019. The judgement in that instance found they should not have to pay around $35m in taxes.
The news, of course, is fantastic for Apple and for the Irish government who maintained that the tech giants were not getting any preferential treatment in their tax arrangements. The Irish government’s economic model, which is based around charging just 12.5% in corporation tax, means that it has become a major hub for other multinational tech companies seeking to access the EU single market.
Tech companies such as Facebook, Google and Twitter can also breathe a sigh of relief as they too use Ireland as their base of EU operations due to favourable taxation laws.
Apple aren’t entirely out of the woods yet, however, with antitrust regulators within the EU launching a probe into a so called ‘Apple tax’, a tariff which they charge to companies within their iOS system for taking payments.
Although Apple’s activities and practices are under investigation on both sides of the Atlantic, the $22.3bn they made in profits last year would suggest there’s no sign of it impeding their growth.
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