Apple's EU tax dispute

European investigation into Apple's tax deal with Ireland
Type of project	State aid investigation under EU rules
Owner	European Commission
Key people	Margrethe Vestager, Tim Cook, Helena Malikova, Michael Noonan
Established	29 August 2016 (2016-08-29)
Disestablished	15 July 2020 (2020-07-15)
Status	finding annulled by European General Court

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Apple's EU tax dispute refers to an investigation by the European Commission into tax arrangements between Apple and Ireland, which allowed the company to pay close to zero corporate tax over 10 years.^[1]

On 29 August 2016, after a two-year investigation, Margrethe Vestager of the European Commission announced: "Ireland granted illegal tax benefits to Apple".^[2] The Commission ordered Apple to pay €13 billion, plus interest, in unpaid Irish taxes from 2004–14 to the Irish state.^[3] It was the largest corporate tax fine (in fact a recovery order, technically not a fine) in history.^[4] On 7 September 2016, the Irish State secured a majority in Dáil Éireann to reject payment of the back-taxes,^[5] which including penalties could reach €20 billion,^[6] or 10% of 2014 Irish GDP.^[a] In November 2016, the Irish government formally appealed the ruling, claiming there was no violation of Irish tax law,^[7][8] and that the commission's action was "an intrusion into Irish sovereignty", as national tax policy is excluded from EU treaties.^[9] In November 2016, Apple CEO Tim Cook, announced Apple would appeal,^[10] and in September 2018, Apple lodged €13 billion to an escrow account, pending appeal.^[11] In July 2020, the European General Court struck down EU tax decision as illegal, ruling in favor of Apple.

The issue was Apple's variation of the Double Irish tax system, which, from 2004 to 2014, Apple used to shield €110.8 billion^[6][12] of non–US profits from tax.^[13]

On 9 January 2015, Apple informed the Commission^[b] that it closed its hybrid–Double Irish, base erosion and profit shifting (BEPS) tool.^[14] In Q1 2015, Apple restructured into a new Irish BEPS tool called the Capital Allowances for Intangible Assets (CAIA) tool,^[12][15] also called the Green Jersey. Apple's Q1 2015 restructuring required a 12 July 2016 restatement of Irish 2015 GDP, which increased it by 26.3 per cent (later revised to 34.4 per cent); the restatement was called "leprechaun economics", and led to new EU inquiries in 2017,^[16][17] and accusations in June 2018, that Ireland was the world's largest tax haven.^[18]

Ireland's rejection of the EU Commission's "windfall" in back-taxes surprised some.^[19]

On 15 July 2020, the European General Court ruled that the Commission "did not succeed in showing to the requisite legal standard" that Apple had received tax advantages from Ireland, and ruled in favour of Apple.^[20]

The European Commission appealed the decision of the lower court before the European Court of Justice, the supreme court in matters of EU law.

In November 2023, the advocate general Giovanni Pitruzzella in his role of top adviser to the European Court of Justice, recommended that the European Court of Justice annuls the decision of the lower European General Court. This is because the lower court did not correctly assess "the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings", according to Pitruzzella. The European Court of Justice's final judgement is expected in 2024, the court follows the recommendation of its advocate general around four times out of five.^[21]

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