European Union antitrust chief Margrethe Vestager has scored two major wins as Europe’s top court has backed her crackdown against Apple’s Irish tax deal and Google’s anticompetitive practices in two landmark cases.

Vestager, who ends her term in November, has made a name for herself going after Big Tech’s tax arrangements with some EU countries and attempts to stifle smaller rivals. The court victories, which were announced on Tuesday, could embolden her successor to take a similar tack.

The antitrust chief cheered the judgements. “Today is a huge win for European citizens and tax justice,” she said on X of the Apple ruling while also praising the Google judgement as a big win for digital fairness.

The European Commission in 2016 ordered Apple to pay 13 billion euros ($14.4bn) in back taxes to Ireland, saying the iPhone maker benefitted from two Irish tax rulings for more than two decades that artificially reduced its tax burden to as low as 0.005 percent in 2014.

The Luxembourg-based Court of Justice of the EU sided with Vestager.

“The Court of Justice gives final judgment in the matter and confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover,” its judges said.

They said Apple’s two units incorporated in Ireland enjoyed favourable tax treatment compared with resident companies taxed in Ireland, which are not capable of benefitting from such advance rulings by the Irish tax authorities.

Apple said it paid $577m in tax, 12.5 percent of the profit generated in the country, in line with the tax laws in Ireland in the period 2003-2014 covered in the EU investigation. It said it was disappointed with the ruling.

“The European Commission is trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US,” Apple said.

Separately, Apple said in a regulatory filing that it was expecting to record a one-time income tax charge of up to about $10bn in its fourth quarter, which ends on September 28.

Ireland, whose low tax rates helped it to attract Big Tech to set up their European headquarters there, had also challenged the EU ruling, saying its tax treatment of intellectual property transactions is in line with other countries in the Organisation for Economic Co-operation and Development (OECD).

Source: Al Jazeera 

BDST: 1000 HRS, SEPT 11, 2024
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