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Apple's $13 billion Ireland tax saga lurches back to life after yet another EU appeal

Apple Ireland

The European Commission has appealed to the highest court in Europe to overturn a lower tribunal's decision that sided with Apple in its 13 billion Irish back taxes legal case.

Apple's back taxes saga would've put the iPhone maker on the hook for a total of 13 billion euros ($14.3 billion) to be paid to Ireland, but a 2020 appeal sided with Apple. After insisting in 2020 it would appeal, the Commission has finally petitioned the Court of Justice of the European Union on the matter.

According to the Commission lawyer Paul-John Lowenthal, the outcome of the case "will determine whether member states may continue to grant multinational substantial tax breaks in return for jobs and investments," reports Reuters.

The affair stems from a 2016 ruling by the European Commission that Ireland had extended preferential tax treatment to Apple, which has its European headquarters located in the country. Both Apple and Ireland appealed the ruling, and Apple also paid the 13.1 billion euro outstanding balance, as well as an additional 1.2 billion in interest, into an escrow account held by the Irish government.

In July 2020, the EU's second-highest court found in favor of Apple and Ireland, ruling that the Irish government did not unlawfully aid Apple in reducing its tax bill. However, Lowenthal insisted to the court that the ruling was "legally flawed."

In response, Daniel Beard representing Apple said it had paid its fair share of taxes, since the profits were "subject to the U.S. tax regime." Apple had built up reserves for those taxes, and "is paying around 20 billion euros in tax in the U.S. on those very same profits that the Commission says should have been taxed by Ireland."

"Apple has paid the taxes that were due under the Irish tax code," Beard continued.

Since the start of the affair, the taxation landscape has changed considerably, with Ireland part of an OECD tax agreement that ends its status as a tax haven.

Meanwhile, Apple's Irish HQ continues to rake in cash, with Apple Operations International seeing 5.5% higher annual sales year-on-year of $222.75 billion to September 2022. Across its global operations, payable by the HQ, Apple paid corporation tax of $7.69 billion, a 73% year-on-year increase, though it is unknown how much of that was paid to Ireland.

An opinion is expected on November 9, 2023.