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Brussels appeals court ruling that Apple doesn't need to pay €13 billion in back taxes

European Union Competition Commissioner Margrethe Vestager on July 15, 2020 in Brussels.
European Union Competition Commissioner Margrethe Vestager on July 15, 2020 in Brussels. Copyright AP Photo/Virginia Mayo
Copyright AP Photo/Virginia Mayo
By Alice Tidey with AP
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The Commission's legal battle against the tech giant and Ireland dates back to 2016. It argues the low tax rate Apple pays Dublin amounts to state aid.


Brussels announced on Friday it is appealing a court ruling that said Apple did not have to repay €13 billion in back taxes to Ireland.

Competition Commissioner Margrethe Vestager said in a statement the European Union "respectfully considers that in its judgment the General Court has made a number of errors of law".

"For this reason, the Commission is bringing the matter before the European Court of Justice," she added.

The Commission's legal battle against Apple started in 2016 when Vestager announced that a two-year investigation in the matter had found that the California-based tech giant had been "granted undue tax benefits" by Ireland which she said amounted to state aid.

Brussels forbids state aids arguing it distorts competition.

At the time, Vestager said that "this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014".

She then ordered the repayment of the 13 billion in back taxes. Both Ireland and Apple appealed the ruling.

In July, the European General Court sided with Ireland and Apple, arguing the Commission was wrong to declare that the technology company "had been granted a selective economic advantage and, by extension, state aid".

Vestager said on Friday that although, as the court confirmed again, taxation laws are determined at the national level, "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".

"We have to continue to use all the tools at our disposal to ensure companies pay their fair share of tax."

"We need to continue our efforts to put in place the right legislation to address loopholes and ensure transparency," she added.

Apple said the case was never about how much tax it pays but where it's required to pay. The appeal "will not alter the factual conclusions of the General Court, which prove that we have always abided by the law in Ireland, as we do everywhere we operate," the company said.

The EU has been trying to create a digital services tax that would see multinationals' profits in each country they are made taxed at a rate of a least 2 per cent instead of just in the countries they are headquartered.

But negotiations have been slow due, in part, to resistance from Washington.

In a speech to the United Nations on Friday, EU Council President Charles Michel reaffirmed the bloc's commitment on this front.

"The European Union is also committed to advancing overall tax fairness, in particular in the digital sector. Large-scale activities carried out in this area can no longer escape fair taxation. The European Union is committed, alongside the OECD and the G20, to international cooperation to correct this injustice," he said.

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