Apple has been told it will not have to pay Ireland €13bn (£11.6bn) in back taxes after winning an appeal at the European Union’s second-highest court.
It follows a record ruling by the European Commission against the US tech giant in 2016.
The EU’s General Court said it had annulled that call because the Commission had not proven Apple had broken competition rules.
It is a blow for the EU which wants to clamp down on alleged minimization.
However, it has the right to appeal the decision to Europe’s highest court, the European Court of Justice.
“This case wasn’t about what proportion tax we pay, but where we are required to pay it,” Apple said during a statement. “We’re proud to be the most important taxpayer within the world as we all know the important role tax payments play in society.”
The Irish government – which had also appealed against the ruling – said it had “always been clear” Apple received no special treatment.
“The right amount of Irish tax was charged… in line with normal Irish taxation rules.”
EU Competition Commissioner Margrethe Vestager, who brought the case, said she would “study the judgment and reflect on possible next steps”.
The European Commission brought the action after claiming Ireland had allowed Apple to attribute nearly all its EU earnings to an Irish head office that existed only on paper, thereby avoiding paying tax on EU revenues,
The commission said this constituted illegal aid given to Apple by the Irish state.
However, the Irish government argued that Apple shouldn’t need to repay the taxes, deeming that its loss was worthwhile to form the country a beautiful home for giant companies.
Ireland – which has one among rock bottom corporate tax rates within the EU – is Apple’s base for Europe, the center East, and Africa.
In Wednesday’s ruling, the Luxembourg-based General Court sided thereupon position, saying there wasn’t enough evidence to point out Apple was given preferential treatment.
Pressure to continue
The ruling could spell bad news for EU efforts to clamp down on other cases of alleged corporate minimization.
Ms. Vestager has spent much of her time in office campaigning against tax schemes she argued were anti-competitive. However, last year she lost a case against Starbucks which was accused of owing €30m in back taxes to the Netherlands.
Rulings over Ikea and Nike’s tax arrangements therein country also are due soon.
Jason Collins, partner and head of tax at firm Pinsent Masons, said: “Apple’s victory shows that European courts are unwilling to call beneficial tax regimes state aid, even when designed to draw in foreign investment – provided they apply the principles consistently.
“This is going to be a really welcome outcome for other multi-nationals who are watching this case closely.”
However, he said Brussels was likely to appeal, and EU efforts to tackle minimization would continue.
“We expect the EU to continue applying pressure during this area,” he said.
Source: bbc news