Apple supports EU court over 13 billion euros in taxes

Apple Inc. The logo is displayed on Wednesday, June 3, 2020 at the company’s store in Omotsando district, Tokyo, Japan.


Apple on Wednesday won a case in court against the European Commission over a 13 billion euro ($ 15 billion) dispute in Irish taxes.

In a much-awaited milestone ruling, the European Union General Court decided that the European Commission had not succeeded in proving that there was an advantage given to the US tech giant by the Irish government.

Commission was in executive hands of the European Union In August 2016 it was concluded that the Irish government provided illegal tax benefits to Apple and ordered it to recover 13 billion euros.

At the time, the commission said Ireland had enabled Apple to pay “significantly lower taxes than other businesses over many years”, which meant that the US company In 2003 it was allowed to pay an effective corporate tax rate of 1% on its European profits, which fell to 0.005% in 2014.

The Irish government and Apple decided to appeal the commission’s decision, with the latter’s order to pay taxes “defying reality and common sense.”

Ireland, Apple and the European Commission now have two months to decide whether they want to appeal the latest court ruling and possibly take it to the European Union supreme tribunal.

In response to the court’s ruling, the Irish government said on Wednesday that it was always clear that “no special treatment was provided to the two Apple companies” and that “the right amount of Irish tax was taxed according to general Irish taxation Gone. Reigns. “

The European Commission and Apple were not immediately available for comment when contacted by CNBC on Wednesday morning.

Why does it matter?

This case, involving a huge US tech firm, is particularly important and a focal point of the EU’s crackdown on taxation in recent years. This may affect how the Brussels institution deals with other companies on taxation matters.

Taxation is playing an even more prominent role in the wake of the Kovid-19 crisis. Many governments will be on the lookout for new sources of revenue in the form of taxation, with their spending going forward.

In this context, there is an ongoing debate over whether the EU should have its own digital tax – a tax on big tech giants to ensure they pay a fair share compared to more traditional businesses.

Spain’s Minister of Foreign Affairs Arancha Gonzalez told CNBC’s “Squawk Box Wednesday”: “Whether the companies are American, whether they are Chinese, Japanese, Korean or European, it is about the fairness of taxation systems.”

The technology has been met with opposition from the greater United States to implement the scheme by some European nations, including Spain, which argues that the levy is discriminatory toward its domestic firms.

“What we are saying is that fairness requires every economic activity, whether economic activity is provided economically or digitally, to contribute with a fair share of their taxes,” the Spanish minister said.

This is a breaking news and is being updated.