Apple to pay Ireland $14.35 billion: what EU ruling means for the iPhone maker

The European Union’s Court of Justice, the bloc's highest court, decided that Ireland gave the US tech giant illegal tax benefits worth €13 billion ($14.35 billion). Now, Apple has to pay it back.

The eight-year legal battle between Apple and Ireland on one side and the European Commission (EC) on the other seems to have ended in a massive loss for the US tech behemoth. In the world’s largest-ever antitrust case, the EU's Court of Justice confirmed that “Ireland granted Apple unlawful aid which Ireland is required to recover.”

In 2016, the EC found that Apple received “illegal state aid” between 1991 and 2014, concluding that the tech giant owes Irish authorities €13 billion in unpaid taxes. Ireland has offered generous tax cuts to Apple, which gave the company “an unfair and select advantage” over other companies in the country, the EC said.

Apple and the Irish government protested the decision to the EU’s General Court, which ruled that the EC failed to show that the iPhone maker received tax advantages from Ireland. Meanwhile, today’s decision by the EU Court of Justice “sets aside the judgment of the General Court and gives final judgment in the matter, conversely confirming the Commission’s decision.”

“In that context, the Court confirms in particular the Commission’s approach according to which, under the relevant provision of Irish law relating to the calculation of tax payable by non-resident companies, the activities of the branches of ASI and AOE in Ireland had to be compared not to activities of other Apple Group companies […],” EUs top court said.

According to The Irish Times, Apple’s spokesperson commented on the court’s decision saying that the case “has never been about how much tax we pay, but which government we are required to pay it to”.

"The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US," the company said.

The full sum of money Apple owes to Ireland has been held in an escrow account in Dublin and reportedly currently amounts to €13.8 billion ($15.2 billion).