Nandini Roy Choudhury, writer
Brief news
- The European Court of Justice ruled against Apple in a long-standing tax dispute, reaffirming the European Commission’s 2016 decision for Apple to pay 13 billion euros in back taxes to Ireland.
- Apple argued that its income was already taxed in the U.S. and criticized the Commission’s retroactive changes to tax rules.
- The case highlights ongoing tensions between U.S. tech companies and the EU, which is addressing issues like taxation, data protection, and antitrust through various regulations and investigations.
Detailed news
On Tuesday, the European Court of Justice issued a ruling against Apple in its decade-long legal dispute regarding its tax affairs in Ireland.
After Apple unveiled a plethora of new product offerings in an effort to revitalize its iPhone, Apple Watch, and AirPod inventories, the European Court of Justice issued a pronouncement.
“According to Reuters, the European Commission is attempting to retroactively alter the rules and disregard the fact that our income was already subject to taxes in the United States, as mandated by international tax law,” the company stated in a statement.
At 09:52 a.m. London time, Apple shares were down 1% in premarket trading.
The Irish government stated in a statement that the Apple case “involved an issue that is now of historical relevance only.” It also reiterated that its stance has always been that it “does not give preferential tax treatment to any companies or taxpayers.”
The government has announced that it will commence the procedure of transferring the assets in the escrow fund to Ireland.
To date, the case has been
The European Commission, the executive branch of the European Union, initiated an inquiry into Apple’s tax payments in Ireland, the location of the tech giant’s headquarters in the EU, in 2014.
In 2016, the commission directed Dublin to recoup up to 13 billion euros ($14.4 billion) in back taxes from Apple. At the time, the commission asserted that the technology company had received “illegal” tax benefits from Ireland over the span of two decades.
In 2019, Apple and Ireland appealed the commission’s decision, and the EU General Court ruled in favor of the U.S. tech behemoth in 2020. The 2016 decision of the commission was annulled by the EU’s second-highest court, which claimed that the executive arm had failed to establish that the Irish government had granted Apple a tax advantage.
The General Court’s decision was subsequently appealed by the commission, which subsequently escalated the litigation to the ECJ.
On Tuesday, the European Court of Justice (ECJ) overturned the General Court’s judgment and reaffirmed the commission’s initial 2016 decision.
The ongoing conflict between U.S. tech titans and the EU, which has endeavored to address a range of issues, including data protection, taxation, and antitrust, is underscored by the case, which started under the tenure of outgoing competition chief Margrethe Vestager.
The EU’s pursuit of Apple was not an isolated incident. The commission most recently imposed an antitrust sanction of 1.8 billion euros on Apple in March for abusing its dominant position in the market for the distribution of music streaming applications.
In Europe, corporations have been compelled to modify certain practices as a result of the EU’s comprehensive Digital Markets Act. The commission has initiated a variety of investigations into technology titans, such as Apple, Alphabet, and Meta, under the DMA.
Source : CNBC News
