In 1980, Apple established a manufacturing centre in Cork. Apple was given its first “tax ruling” in 1991 by Ireland, according to the EU. This ruling was meant to decide what profits from Apple’s Irish-based units, Apple Sales International and Apple Operations Europe, are taxable in Ireland. In 2007, Apple’s tax deal in Ireland was supplanted by a second “tax ruling” related to the same units.
In May 2013, Ireland was deemed a tax haven for multinational corporations like Apple by US senators John McCain and Carl Levin during tax avoidance hearings in Washington. Apple, a California company, was accused of evading billions in US taxes by storing profits in tax-free Irish “ghost companies”.
Also in May 2013, Apple stated that it had paid a tax rate of less than 2 per cent in Ireland for the past decade. McCain and Levin disputed the assertion by Ireland’s then U.S. ambassador, Michael Collins, that Ireland was not a tax haven. They argued that special tax arrangements enabling companies to pay little or no income tax fitted the simple definition of a tax haven.
In June 2013, the EU started questioning Ireland, Luxembourg and the Netherlands about the legality of various tax deals with corporations, including Apple’s arrangements in Ireland. Later in October, Irish Finance Minister Michael Noonan unveiled plans to prevent Irish-registered companies from being “stateless” for tax reasons, thereby closing a loophole that Apple had utilised for many years.
By June 2014, the EU had begun an official investigation into Apple’s tax dealings in Ireland. Preliminary findings released by EU in September 2014 suggested that Apple’s tax arrangements had been inappropriately constructed to provide the company with a financial edge in exchange for jobs in Ireland.
In November 2015, during a visit to Dublin, Apple’s CEO, Tim Cook, unveiled plans to create an additional 1,000 jobs, asserting that the ongoing EU investigation won’t impact the company’s operations in Ireland. Subsequently, in August 2016, the European Union made its final ruling on the Irish-Apple case, ordering the Republic of Ireland to recover as much as €13 billion in unpaid taxes from the tech giant. The decision sparked a question about possible stagnation of office development in Dublin.
In September 2016, the Dáil sanctioned the Fine Gael minority government’s decision to contest the EU’s ruling – the appeal was lodged in November with the EU’s General Court. The company also challenged this decision in December 2016, claiming they were chosen as an easy target.
Fast forward to September 2018, the Irish government tentatively collected €14.3 billion, inclusive of interest, from Apple – this amount was held in escrow pending the final resolution of the litigation concerning the case.
In September 2019, two days of oral hearings on this case were held at the General Court in Luxembourg, which is the second-highest court within the EU. July 2020 saw the General Court overturn the commission’s ruling.
In May 2023, Apple informed a hearing at the European Court of Justice that it was remitting €20 billion in tax to the US, on the same profits that the European Commission contended should attract back taxes of €13.1 billion in Ireland.
However, by September 2023, the European Court of Justice ruled in favour of the European Commission, demanding Apple to pay billions of euros in back taxes to the Irish Republic. This move struck a significant blow to both the Irish Government and the American tech behemoth.
In November 2023, a senior advisor to the European Court of Justice advised that the 2020 General Court decision, which concluded no tax was owed, be overruled due to legal and methodological errors regarding Apple’s Irish tax liabilities. As such, he suggested the ECJ return the case to the General Court for a fresh verdict on its merits.