Apple Wins Landmark 13 Billion Euro Tax Appeal Against the EU

Apple (NASDAQ: AAPL) has landed an important win in a tax case against the European Union (EU). The General Court of the European Union -- its second-highest court -- shot down a 2016 decision by the EU that handed Apple a bill for 13 billion euros in back taxes (about $14.85 billion at current exchange rates), alleging that the Irish government had provided the company with an unfair subsidy.

At the time, the European Commission -- the EU's antitrust regulator -- charged that Apple had been on the receiving end of illegal tax benefits granted by Ireland that allowed it to pay "substantially less tax than other businesses over many years," and ordered the country to recoup the unpaid taxes.

A gavel near a laptop with piles of 100 dollar bills and a scale nearby.

Image source: Getty Images.

The Commission alleged that the arrangement between Ireland and Apple constituted illegal state support of the company, and that these deals allowed Apple to pay just 1% of its profits in taxes for the years in question.

In court hearings, Apple's lawyers argued that the EU's charges "defied reality and common sense." CEO Tim Cook went even further at the time, questioning the logic of the decision saying, "They just picked a number from I don't know where," and labeled the decision "total political crap." 

In the case, the Irish government sided with Apple against the EU, disputing the allegations and maintaining that "that there was no special treatment provided to ... Apple." It asserted that "the correct amount of Irish tax was charged in line with normal Irish taxation rules." 

The General Court appears to have agreed with that view. It issued a harsh rebuke of the European Commission in its annulment of the decision, saying that there was no proof that Apple was given any special treatment.

The EU now must decide if it will appeal the decision to the European Court of Justice, the bloc's highest court.

10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 2, 2020


Danny Vena owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.