European Union: Apple owes Ireland nearly $15 billion in back taxes
The European Commission failed to prove Apple tax violations in Ireland
Apple won a major lawsuit. On the eve of the second largest European court rejected the EU order on the fine of the company in the amount of 13 billion euros.
Four years ago, the European Commission said a US corporation had benefited from illegal government aid through two Irish tax regulations that artificially reduced its tax burden over the years..
«The court cancels the penalties, since the commission failed to prove the fact of violation of the law», – stated in court, citing EU competition rules.
The legislature’s press office added that the EU’s chief executive was wrong in arguing that Apple’s two Irish subsidiaries – Apple Sales International (ASI) and Apple Operations Europe (AOE) – received a special economic advantage and, as a result, government aid..
The Irish government, which appealed the commission’s decision with Apple, said it was clear to everyone that the country was not paying much attention to the American company..
Defeat of the European Commissioner and the plaintiff Margrethe Vestager may postpone proceedings against Ikea and Nike’s deals with the Netherlands and Huhtamaki’s deal with Luxembourg.
Vestager, who made tax oversight a centerpiece of her tenure, noted that the same court last year overturned her claim to Starbucks to pay up to € 30 million in taxes on Dutch operations.. In another case, the court also dismissed her claims against the Belgian tax scheme for 39 multinational corporations..
Vestager said she will study the court decision and consider possible further steps, and did not rule out filing an appeal.
The commission, which is now required to pay legal fees to Apple and Ireland, can still save the case, said Dimitrios Kyriazis, Head of Law School, New Liberal Arts College London.
The European Network for Debt Research and Development (Eurodad) said the decision signals the need for corporate tax reform in Europe.
«Today’s court ruling shows how difficult it is to use EU state aid rules to collect taxes. If we had the right corporate tax system, we wouldn’t need lengthy litigation to find out if it is legal for multinationals to pay less than 1 percent of taxes.», – said the coordinator of tax justice Tove Maria Riding.
Ireland has long been the focus of tax disputes. In transnational corporations, attracted by the low taxes of this country, about 250 thousand people work (every tenth worker in Ireland).
However, the government has faced harsh criticism from opposition parties, which indicate that with the reform of the tax system, payments would amount to 14 billion euros, and could cover half of the forecast of the budget deficit, which this year will grow to 10% of GDP..