The dispute between Apple and the European authorities over the tax practices of the tech behemoth in Ireland culminated in a decisive ruling by the European Court of Justice on Tuesday.
Shortly after Apple’s announcement of a range of new products aimed at invigorating its iPhone, Apple Watch, and AirPod offerings, the court’s judgment was handed down.
Attempting to elicit a response, queries have been directed towards Apple by various entities.
“The attempt by the European Commission to retroactively alter regulations and disregard the fact that, in compliance with international tax statutes, our earnings were already subject to U.S. taxes,” Apple stated in response, as reported by Reuters.
At 09:52 a.m. London time, Apple shares experienced a 1% decline in premarket trading.
In a released statement, the Irish government asserted that the Apple case pertains to matters now considered to be solely of historical significance and reiterated its stance of not according preferential tax treatment to any corporations or individuals.
It was indicated by the government that the process of transferring the assets in the escrow account to Ireland will now commence.
Chronology of the legal proceedings
In 2014, an inquiry into Apple’s tax obligations in Ireland was initiated by the European Commission, which serves as the administrative arm of the European Union and where Apple’s headquarters in the EU are located.
Following the General Court’s ruling, the commission proceeded to challenge the decision, leading to the escalation of the legal battle to the ECJ.
The ECJ’s decision on Tuesday resulted in the overturning of the General Court’s verdict and upheld the commission’s initial ruling from 2016.
Under the purview of the outgoing competition chief Margrethe Vestager, the case underscores the persistent clash between U.S. tech giants and the EU, which has been actively confronting various issues ranging from data protection to tax practices and antitrust concerns.
This episode is not the sole instance of Apple coming under scrutiny in the EU. More recently, the commission imposed an antitrust penalty of 1.8 billion euros in March on Apple for the exploitation of its dominant market position in the music streaming app distribution sector.
Moreover, the comprehensive Digital Markets Act of the EU has necessitated adjustments in the operational methodologies of several companies in Europe. Investigations under the DMA have been initiated by the commission targeting tech giants such as Apple, Alphabet, and Meta.
