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This article was published on July 15, 2020

Apple wins tax battle against EU, avoids $15B fine

The decision is a blow to the bloc's crackdown on "sweetheart deals"

Apple wins tax battle against EU, avoids $15B fine Image by: Armand Valendez from Pexels
Thomas Macaulay
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Thomas Macaulay

Writer at Neural by TNW Writer at Neural by TNW

Apple has won its appeal against an EU order to pay Ireland $15 billion in back taxes, after Europe’s second-highest court rejected the bloc’s claims that the tax breaks were an illegal subsidy.

The case stems from a 2016 European Commission ruling that Ireland had breached the EU’s state-aid rules by giving Apple illegal tax benefits for more than a decade.

The EU’s General Court on Wednesday annulled the decision because the Commission hadn’t shown “to the requisite legal standard” that Apple had received an unfair advantage.

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“The General Court considers that 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 court said in a press release.

[Read: EU privacy watchdog thinks that Clearview AI is illegal]

Apple responded to the decision in a statement:

“This case was not about how much tax we pay, but where we are required to pay it. We’re proud to be the largest taxpayer in the world as we know the important role tax payments play in society.”

The Irish government had joined the firm in appealing the ruling, as its low tax regime has attracted 250,000 multinational companies.

“Ireland has always been clear that there was no special treatment provided to the two Apple companies. The correct amount… was charged in line with normal Irish taxation rules,” the finance ministry said in a statement.

However, opposition parties slammed the ruling. Sinn Fein finance spokesperson Pearse Doherty said: “Today was a bad day for the Irish taxpayer.”

The decision is also a big blow to Margrethe Vestager, the European Commissioner for Competition. Vestager had led the probe into Apple’s “sweetheart deal” and has made crackdowns on low-tax regimes the focal point of her time in office.

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