Apple victory in £11bn fight over Irish tax

APPLE and the Irish government have won their appeal against the European Commission over an £11.6billion tax bill.

The General Court in Luxembourg annulled the decision taken by the commission over Dublin’s tax rulings in favour of the tech giant.

The commission previously said Apple paid an effective corporate tax rate of just one per cent on profits from sales across the EU by routing them through a firm based in Ireland.

The commission said this constituted illegal aid by the Irish state.

But in its judgment, the General Court said the commission was wrong to declare that Apple Sales International (ASI) and Apple Operations Europe (AOE) had been granted a selective economic advantage and, by extension, state aid.

The court said the commission did not succeed in showing to the “requisite legal standard” that there was an advantage. It added: “The commission incorrectly concluded that the Irish tax authorities had granted ASI and AOE an advantage as a result of not having allocated the Apple Group intellectual property licences held by ASI and AOE, and consequently, all of ASI and AOE trading income obtained from the Apple Group’s sales outside North and South America, to their Irish branches.”

The commission can appeal to the European Court of Justice.

Ireland’s open economy is based on low corporate taxation and other incentives to attract multinationals. In Apple’s case, it was significantly below the standard 12.5 per cent imposed on corporations.

Apple said that from 2003 to 2014, it paid £457.6million in tax on profit generated in Ireland, in line with the country’s tax laws.

The Department of Finance said: “Ireland has always been clear that there was no special treatment provided to the companies.”