Court decision: Apple does not have to pay a fine of 13 billion euros

The dispute between the EU, Ireland and Apple, which has lasted since 2016, has come to a temporary end. The EU court in Luxembourg has rejected the EU Commission’s claim against Apple. Now the Commission has two months to appeal the ruling.

The proceedings have attracted public attention, not only because of the high amount of the claim. The proceedings can also be seen as an example in dealing with tax breaks for large companies offered by some EU member states. Ireland assumes a pioneering role here – as a business location, the state is popular above all because of the tax agreements it concludes with large corporations.

Ireland fights for attractiveness as a business location

These special regulations are a thorn in the side of the EU Commission: In April 2016, the EU Commissioner for Competition, Margrethe Vestager, asked Apple to pay the 13 billion euros saved. The demand was based on an inadmissible special treatment by the Irish state. Apple and Ireland had defended themselves against the demand.

Besides Ireland, Luxembourg in particular is also known as a tax-saving country. For Ireland (and also Luxembourg), the proceedings, which have now been provisionally concluded, are therefore at stake: prestige projects such as Apple’s settlement in Cork, Ireland, would probably not survive without the tax deals. Ireland therefore has a great interest in winning the proceedings. The same applies to Apple – for the company, it’s not just about the billion-dollar sum but also about its own reputation, as the company doesn’t want to be known as a tax cheat.

Subtopic: Tax dispute between EU and USA

A tax dispute between the EU and the USA is also affected: Apple argued in the proceedings, among other things, that the revenues of the Irish subsidiary are taxable primarily in the USA, as the value added is largely generated there. Although the EU Commission does not dispute this point in its entirety, it points out that Ireland did not examine the Apple subsidiaries in sufficient detail in this respect.

It is not expected that the EU Commission will drop its demand for the ruling. The EU Commission will in all probability challenge the ruling that the tax deals do not constitute unjustified state aid. The next instance will then be the European Court of Justice.

Simon Lüthje

I am co-founder of this blog and am very interested in everything that has to do with technology, but I also like to play games. I was born in Hamburg, but now I live in Bad Segeberg.

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