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EU Commission to appeal Apple ruling in Ireland over $14.9 billion tax case

EU Commission to appeal Apple ruling in Ireland over $14.9 billion tax case


The EU says Ireland gave Apple a deal to pay less taxes, but a court annulled the judgment in July

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Illustration by Alex Castro / The Verge

The European Commission is appealing a July court judgment in the ongoing saga of Apple’s taxes in Ireland. Buckle in, this one gets a bit complicated. And it’s likely to drag on for some time.

In July, the General Court of the EU annulled a 2016 ruling by the European Commission. In that ruling, the commission had determined that Ireland gave Apple a “sweetheart deal” that let the iPhone maker pay significantly lower taxes than other businesses. “Member States cannot give tax benefits to selected companies — this is illegal under EU state aid rules,” EU antitrust chief Margrethe Vestager said in 2016.

The commission ordered Apple to pay €13 billion ($14.9 billion) in back taxes to the Irish government. Ireland and Apple both disputed the decision, with CEO Tim Cook calling the judgment “total political crap.”

But in the July ruling, the judges said that the commission had failed to make its case. “The commission did not succeed in showing to the requisite legal standard that there was an advantage” for Apple, they declared, and “the commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.”

The commission said Friday it will appeal the court’s July ruling, with Vestager saying in a statement that the court “has made a number of errors of law.”

“The General Court has repeatedly confirmed the principle that, while Member States have competence in determining their taxation laws taxation, they must do so in respect of EU law, including State aid rules,” Vestager said. “If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the European Union in breach of State aid rules.”

An Apple spokesperson said in a statement emailed to The Verge on Friday that it would review the commission’s appeal when it receives it, adding that the company has always abided by the law in Ireland and other places it operates. “The General Court categorically annulled the Commission’s case in July and the facts have not changed since then,” the spokesperson said. “This case has never been about how much tax we pay, rather where we are required to pay it.”

Irish Finance Minister Paschal Donohoe told The Irish Times Friday that the appeal was “expected,” and that it would likely “take a number of years further before this matter is further determined.”