Affiliate Disclosure
If you buy through our links, we may get a commission. Read our ethics policy.

Apple must fight $15.3B EU tax bill without US government help, court says

Court of Justice of the European Union

Last updated

On Thursday, the European Union Court of Justice blocked U.S. efforts to side with Apple in the appeal of a $15.3 billion tax bill, which the European Commission first ordered Ireland to collect in August 2016.

The Court of Justice upheld a lower-court decision in December 2017, which said the U.S. had failed to show how it had a direct interest in the matter, Bloomberg reported. The latest ruling was announced via Twitter.

The U.S. government argued it does have a vested interest in Apple's EU tax struggles, as the company could potentially claim tax credits for paying money in Ireland. The Treasury has even claimed that the EU is making itself a "supra-national tax authority."

The EU however has said that Ireland extended preferential tax treatment to Apple for years, even reverse-engineering rules on the fly to make the company happy. Under the Union's laws, benefits offered to one company must be available to others — otherwise, it can constitute illegal state aid.

Apple has funneled large sums of international revenue through Ireland, using loopholes to pay minimal taxes. According to the Commission, Apple paid 1 percent on profits in 2003, and as little as 0.005 percent in 2014.

In testimony and elsewhere Apple and Ireland have denied any wrongdoing, claiming they followed all applicable laws. Nevertheless the latter has begun closing some loopholes, and the Commission has proposed new tax rules that would spread Apple's payments around the EU.

Some critics have accused Apple of violating the spirit of the law, and/or depriving social services of badly-needed revenue.

Regardless, Apple's first payments into an escrow fund should start this month. A ruling on the appeal could happen as soon as this fall.