Apple is one of the most successful companies in the world, and people are willing to spend hundreds of dollars to buy an iPhone, iMac, etc. On Wednesday, the tech giant won a court case against the European Commission regarding 13 billion euros ($14.9 billion) in Irish taxes.
The European Union (EU) failed to convince the EU’s general court. The court decided that the commission was unable to prove that there was an advantage given by the Irish government to Apple.
Let’s have a look at this case. The European Commission is the executive arm of the European Union. In August 2016, the commission came to the conclusion that the government of Ireland granted illegal benefits to Apple. And so, the commission ordered the country’s government to recover 13 billion euros in unpaid taxes.
According to the European Commission, the country had enabled Apple to pay significantly less tax in comparison to other companies over many years. As a result, the tech giant paid an effective corporate tax rate of 1% on its European profits in 2003. Moreover, corporate tax fell to 0.005% in 2014.
It is not surprising that the country’s government and Apple decided to appeal the commission’s decision. The European Commission, Apple, as well as Ireland, now have two months to a decision if they want to challenge the latest court ruling. The commission has two months to take this case to the EU’s highest tribunal.
Apple and the importance of this decision
On Wednesday, the Irish government once more reiterated its position regarding this case. According to the government, it was clear that there was no special treatment provided to the two Apple companies.
Unsurprisingly, the European Commission’s position was different from that of the Irish government. According to the statement released by the commission, it will continue to look at aggressive tax planning measures under the EU State aid rules. The commission wants to know whether these result in illegal State aid. Furthermore, the European Commission plans to study the judgment and reflect on possible next steps.
This case is important, as it could impact how the institution in Brussels deals with other companies regarding taxation matters. The issue of taxation and how to administer taxes became even more important due to the ongoing situation. Governments allocated hundreds of billions of dollars to deal with the coronavirus pandemic. As a result, they will have to find new sources of revenue in the form of taxation. However, it will be hard to impose a digital tax on big tech giants. According to the U.S., the levy is discriminatory toward its domestic companies