The European Union's Court of Justice has ruled that Ireland gave Apple illegal tax benefits worth €13 billion from 1991 to 2014, confirming the European Commission's original 2016 decision. This final ruling means Ireland must recover the funds, which Apple placed in an escrow account around six years ago.
Apple and Ireland had previously appealed the decision, with the EU's General Court ruling in their favor in 2020, saying there wasn’t enough proof of preferential treatment. However, the Court of Justice has now overturned that ruling, siding with the Commission.
Apple expressed disappointment, maintaining it followed all tax laws. The company expects a one-time $10 billion tax charge in its upcoming financial report. Meanwhile, Ireland, which initially supported Apple's appeal, stated it will respect the ruling and recover the funds.
The case highlights the EU's efforts to tackle corporate tax avoidance, with Apple’s effective tax rate falling as low as 0.005% on its European profits during the period in question.
The Commission argued that profits were funneled through Irish subsidiaries and untaxed "head offices." Ireland has since changed its tax laws to prevent similar issues in the future.
