Apple must pay £11 billion tax bill for “aggressive tax planning” after European Court upholds Commission’s decision

Apple has been hit with an £11 billion tax bill following the European Court of Justice’s confirmation of the EU Commission’s decision in a tax case against Apple, ending years of legal battles.

The ruling holds Apple accountable for unpaid taxes worth up to €13 billion, underscoring the Commission’s fight against aggressive tax planning by multinational corporations.

At the heart of the case is the Commission’s 2016 finding that Ireland’s tax rulings, granted to Apple since 1991, amounted to illegal state aid.

It was claimed these rulings had artificially lowered Apple’s tax obligations by allowing the company to channel profits through stateless “head offices” that existed only on paper. In 2011, for instance, one of Apple’s Irish subsidiaries reported €16 billion in profits, of which only €50 million was taxable in Ireland, leading to an effective tax rate of just 0.05%.

The case represents a turning point in the EU’s battle against corporate tax avoidance. The Commissioner for Competition Margrethe Vestager said the decision not only confirms the Commission’s authority to intervene in cases where Member States grant unfair tax advantages but also reinforces the broader push for tax reforms.

“It is a step toward closing loopholes and preventing multinationals from exploiting asymmetries between different tax systems, which harm taxpayers and distort competition within the EU,” said Margrethe Vestager, European Union’s Executive Vice President for “A Europe Fit for the Digital Age.”

Vestager was previously the European Commissioner for Competition. She is known for her role in enforcing antitrust regulations, particularly in cases involving large tech companies like Google, Apple, and Amazon. Her work has focused on ensuring fair competition in the EU, particularly in the digital economy, and she has led significant cases on monopolistic practices. She has earned a reputation for standing up to powerful corporations and advocating for stronger regulations in the tech sector.

“While Member States retain their sovereign right to define corporate tax systems, the ruling emphasizes that they must adhere to their own rules, and the Commission can challenge any deviation that results in unfair advantages. The Apple case has been a catalyst for change, prompting countries like Ireland to reform their tax laws to prevent corporations from exploiting such gaps in the future.”

“This ruling, along with other high-profile cases involving Amazon, Fiat, and Belgian Excess Profit, signals a decisive shift in the EU’s approach to tax justice and corporate responsibility. The decision to release the recovered taxes, held in escrow during the legal proceedings, is a significant moment for Ireland and sets a clear precedent for future cases.”

“The judgment, while a victory for the Commission, also illustrates the balance between national fiscal sovereignty and the EU’s commitment to fair competition. It has set the stage for a more transparent and equitable tax system within the Single Market, a win for citizens and businesses alike.”