Involving 13 billion euros! Apple Inc. (AAPL.US) loses massive tax evasion case.

Apple Inc. (AAPL.US) lost a lawsuit involving a 13 billion euro (14.4 billion USD) Irish tax case, furthering the European Union's crackdown on countries providing special benefits to large corporations. The EU court in Luxembourg supported a landmark ruling from 2016, stating that Ireland violated state aid rules by giving Apple Inc. unfair advantages. The court ruled on Tuesday that Apple Inc.'s victory in the lower court should be overturned, as the judges incorrectly concluded that the Commission's regulatory body had made errors in its assessment. This ruling is a boost for EU antitrust commissioner Margrethe Vestager, whose term in Brussels is coming to an end after two terms. In 2016, Vestager targeted Apple Inc.'s tax arrangements, sparking anger across the Atlantic Ocean. She claimed that Ireland had provided illegal benefits to the company, resulting in significantly lower taxes paid over the years compared to other businesses in the country. She ordered Ireland to recover the 13 billion euros, equivalent to a quarter of Apple Inc.'s global Mac sales. This money has been held in an escrow account awaiting a final ruling. An Apple Inc. spokesperson said, "We are disappointed with today's judgment, as the General Court has previously reviewed the facts and specifically declared this case invalid." Before the market opened on Tuesday, Apple Inc.'s stock price had dropped by about 1% at the time of writing. While this is a negative outcome for Ireland, given the time it took to complete this case, it is unlikely to have a significant impact on the country as Ireland is a mature hub for the European headquarters of many large tech companies. Ireland has claimed that it did not provide any tax benefits to Apple Inc. or other tech companies setting up operations in Ireland. Apple Inc. CEO Tim Cook had previously criticized the EU's actions as "political crap." The U.S. Treasury also expressed its opinion, stating that the EU is trying to position itself as a "supranational taxing authority," which could threaten efforts for global tax reform. Former President Trump said that Vestager "hates America" because "she is suing all of our companies." So far, the ruling in the Apple Inc. case is one of the largest in Vestager's ten-year campaign for tax fairness, which has also targeted companies like Amazon.com, Inc. (AMZN.US) and Stellantis NV-owned Fiat. Vestager believes that selective tax benefits for large companies are illegal under EU rules prohibiting unfair state aid. The controversial points in Tuesday's case were two tax agreements reached with the Irish government in 1991 and 2007. According to the EU's assessment, these agreements allowed Apple Inc. to incorrectly attribute profits made in Ireland to a "head office" that existed only on paper. This resulted in a significant reduction in taxes paid. The EU antitrust department argued that the subsidies received by Apple Inc. were anti-competitive and equivalent to illegal state aid. In 2020, after questioning the lower court's ruling in favor of Apple Inc., the case was referred to the EU's highest court. Judges at the EU General Court found that the EU state aid monitoring authority had made several errors. Since then, Vestager has faced several setbacks in this action, but she is encouraged by the judges' support for her use of state aid rules to combat unfair arrangements. Apple Inc. was one of the first major U.S. tech giants to establish a presence in Ireland, due to the country intentionally lowering corporate tax rates in the 1980s and early 1990s to attract foreign investment. The company established its European headquarters in the southern city of Cork in 1980 and currently employs approximately 6,000 people in the country. In the years since, many loopholes in tax laws have been closed, and Ireland signed onto OECD measures in 2021, including a global minimum tax rate of 15% for multinational corporations.