Apple’s European headquarters, located in Cork, Ireland.
After a decade of legal wrangling, the European Union has officially given its final ruling over Apple and Ireland’s allegedly illegal tax agreement, and Apple has to pay up.
Since 2004 when the agreement was made, both Apple and Ireland have continually protested that the amount of tax being paid was legal and fair. It was an exceptionally low rate of tax, however, and moreover the sums being taxed were not just those earned by Apple in Ireland itself.
Instead, Apple effectively splits its operations into the US and the rest of the world, with all of the profits from the rest of the world going through its Ireland HQ. Consequently, in 2014, the EU investigated the agreement and concluded that the practice was not legal.
From that point, Apple has had to pay the required back taxes, but it’s had to do so into an escrow account. While Apple had to pay it, neither it nor the EU could take the money until all legal procedures were complete.
During the years that this has been going on, the money has accrued interest. It is now approximately $14.6 billion.
“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision,” the EU has now said, according to BBC News. “Ireland granted Apple unlawful aid which Ireland is required to recover.”
“The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US,” said an Apple spokesperson. “This case has never been about how much tax we pay, but which government we are required to pay it to.”
“We always pay all the taxes we owe wherever we operate and there has never been a special deal,” the spokesperson continued. “Apple is proud to be an engine of growth and innovation across Europe and around the world, and to consistently be one of the largest taxpayers in the world.”
“We are disappointed with today’s decision as previously the General Court reviewed the facts and categorically annulled this case,” Apple concluded.
It’s now not clear whether Apple has any further recourse to appeals. But if it hasn’t, it means that the accusation of illegal arrangements that was first made by EU Commissioner Margrethe Vestager has taken almost her entire time in office.
