Apple ordered to pay back its illegal $14.4 billion Irish tax break

It’s a bad day for big tech in the EU. After rejecting Google’s appeal of a $2.7 billion antitrust fine, Europe’s highest court ruled that Apple must pay back its €13 billion ($14.4 billion) Irish tax break deemed illegal by the EU Commission way back in 2016.

The decision by the European Court of Justice overturns an earlier 2020 decision by a lower court in Apple’s favor. “[The decision] confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover,” the judges wrote.

In a statement to the Financial Times, Apple said the EU was “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’s effective tax rate for revenue earned in Europe was an effective 1 percent on European profits and as low as .005 percent in 2014. Because the deal gave Apple a “significant advantage” over the competition, the EU Commission ordered it to pay back “illegal state aid” over the ten-year period before it began investigating its tax practices.

The decision follows several setbacks for the European Commission against US corporations. Last year, the ECJ ruled that Amazon wouldn’t be required to pay €250 million ($276 million) in back taxes to Luxembourg and lost a similar case to Starbucks in the Netherlands. So despite today’s wins for the EU, those decisions could haunt future EU cases against big tech around tax havens in individual member states.