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An Apple a day keeps the taxes away

silver iphone x with airpods

The EU’s second highest Court decided on 15 July that Apple does not have to pay Ireland over €14.3 billion in taxes. This overruled the European Commission’s previous decision in 2016, requiring Apple to pay the amount. The Commission had claimed that Apple had not been paying full taxes in Ireland for more than 10 years. The Court held, however, that there was not enough evidence from the Commission to prove that Apple had indeed paid less taxes in Ireland and broken EU competition rules.

Irish Celebrations

The Irish Government could have collected a pretty sum from one of the highest claimed to be taxpayers in the world. Although expecting disappointment from the Irish Government, it actually celebrated this ruling. This is because in the long-term the Government can continue to collect more taxes from Apple regularly, as opposed to a one-off payment and a cold relationship afterwards.

When it comes to numbers, the actual percentage of tax Apple pays in Ireland is 0.005% of revenue. This is significantly less than a regular Irish citizen. However, Ireland is known for having low corporation taxes; it therefore comes as no surprise that Ireland is also Apple’s European, Middle Eastern and African base, and is also known as a ‘tax heaven‘.

Far from over

There still is time for the Commission to appeal the decision to the EU Court of Justice, the highest EU Court. The EU Competition Commissioner, Margrethe Vestager, has already been fighting against EU’s low-tax regimes for years, and so an appeal is very likely. Ms Vestager stated she is ready to analyse the judgement and continue her fight. The matter is therefore foreseen to get to the Court of Justice. Its decision will affect the future of EU Competition Law and set an important precedent for big corporations and tax heavens.

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