A European high court on Wednesday ruled in favour of the technology giant in its legal battle with the European Commission, which had alleged the firm had an illegal sweetheart deal with Irish authorities.
Judges in Luxembourg annulled the commission’s 2016 ruling that Apple had benefited from illegal state aid through two Irish tax breaks that artificially reduced its payments for over two decades to as low as 0.005 per cent in 2014.
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The commission was ”wrong to declare” Dublin had granted Apple “a selective economic advantage and, by extension, state aid,” the EU’s second highest court said. The ruling added the commission ”did not succeed in showing to the requisite legal standard that there was an advantage”.
Welcoming the decision, Apple said: ”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.”
Ireland’s finance ministry said it had “always been clear that there was no special treatment provided” to Apple and “the correct amount” was “was charged in line with normal Irish taxation rules”.
The commission can appeal on points of law only to the EU Court of Justice within the next two months.
The €13.1bn is currently being held in an escrow account, meaning the money cannot be released until there has been a final determination in the European courts over the validity of the decision.
Ireland’s open economy is based on low corporate taxation and other incentives to attract multinationals.
Apple pays significantly below the standard 12.5 per cent imposed on corporations in the country. But the California-based firm said it paid €504m (£456m) tax on profits generated in Ireland between 2003 to 2014 in line with the nation’s tax laws.
The Irish government opposes any effort to force it to change its taxation practices, which have tempted some of the world’s leading financial and technology firms to set up base in Dublin.