Apple Faces €9.1bn Irish Tax

Following a surprising ruling by the European Union’s (EU) highest court, Apple has informed its Wall Street investors of its intention to take a notable tax charge in the last quarter of their financial year. The charge, which could potentially reach up to $10 billion (£7.3 billion), is a result of a protracted dispute over a substantial Irish tax bill, which the court has now ruled must be settled.

The single charge will see an rise in the Californian company’s effective tax rate for this period, according to a company statement released to the stock exchange this Wednesday.

Apple and the Irish State have for years contested the ruling by the European Commission that Apple owed Ireland €13 billion plus interest in unpaid taxes. Both parties argued in the EU’s top court that the taxes were not owed, and the Irish government did not provide preferential tax deals to the tech giant.

The ruling from the European Court of Justice (ECJ) earlier in the day confirmed that the original decision eight years ago was accurate.

Despite the court order, Apple maintained that the case was not primarily about the amount of tax paid but rather the government to which the payment is directed. The tech giant has already paid $20 billion in tax to the US on the same profits the commission argued should have been taxed in Ireland.

Since 2018, the contentious tax bill, with interest included, was held in an escrow account by the Irish Government. At the beginning, the sum was €14.3 billion; however, it diminished to €13.8 billion by last year’s end.

The decrease is largely attributed to the funds’ major investment in European government bonds, which recently decreased in value. It also accounted for a €246 million transfer in 2021 to pay tax in another jurisdiction, a move permitted by the escrow agreement terms.

On Tuesday, the European Court of Justice (ECJ) overruled a four-year-old decision by the lower-ranking General Court. This previous ruling had nullified the claim by the commission that Apple must pay €13 billion in taxes to Ireland, from what is considered to be the world’s largest ever antitrust suit. The ECJ found that the initial ruling by the Luxembourg-based court had contained errors, as it stated that the commission had failed to provide adequate proof to support their claim. Following the ruling, the Government affirmed it would respect the court’s decision. The Finance Ministry stated that this judgment is definitive and that the process of transferring the funds, which have been retained in escrow, to Ireland would commence. However, Tánaiste Micheál Martin was adamant that these finances will not be put towards Ireland’s everyday expenses.

Written by Ireland.la Staff

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