EU takes Ireland to court over Apple’s €13bn tax windfall

Crackdown on multinational tax breaks risks ‘fierce political backlash’ from Washington

A pedestrian walks past an Apple store in Ireland
(Image credit: Adam Berry/Getty Images for Apple)

The European Commission is taking Ireland to court for its failure to recover up to €13bn (£11.6bn) in back taxes from Apple.

In August 2016, the Commission ruled the US tech giant should hand over unpaid taxes, saying it had received illegal state aid - a judgement that was fiercely criticised by Dublin.

This is just “one of a number of deals the EU has targeted between multinationals and usually smaller EU states”, says Reuters.

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The Apple decision prompted “a fierce political backlash” from Washington, and the Commission’s recovery order “could rekindle tensions over Europe’s tax clampdown, just as the US considers tax reforms that encourage US multinationals to repatriate foreign profits held offshore”, says the Financial Times.

Announcing her decision to refer Ireland to the European Court of Justice yesterday, EU Competition Commissioner Margrethe Vestager said that, more than a year after she issued the ruling, Dublin had still not sought even part of the sum.

“We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition,” she added.

The announcement coincided with a demand for Amazon to pay €250m (£223m) in taxes to Luxembourg, which was accused of breaking EU state aid rules by allowing the company to pay “substantially less tax than other businesses”.

Luxembourg, the Netherlands and Belgium have recently recouped millions of euros from multinational corporations including Fiat and Starbucks on the basis that they received illegal tax advantages.

In June, the Commission slapped Google with a record-breaking €2.4bn (£2.1bn) fine, reports The Independent, for abusing its dominant position in the fiercely competitive and rapidly expanding world of online shopping.

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