With Apple finally losing its case in the EU’s highest court, pie in the sky for Ireland – €13bn in back taxes.
In a surprise move, the European Court of Justice (ECJ) recently ruled that Apple’s Irish tax deal violated the EU’s state aid rules and ordered the company to pay nearly €13bn in back taxes and interest to the Irish government – the largest amount of such a ruling in EU history.
Back in 2016, the European Commission accused Apple of evading a huge amount of tax by enjoying unfair tax benefits through a tax deal with the Irish government. Although the EU’s General Court had ruled in 2020 that Apple did not have to pay this back tax, the European Court of Justice eventually overturned the ruling in favour of the European Commission’s decision.
Irish taxes are so high thanks to the US
The European Commission accused the Irish government of illegally granting Apple tax breaks, arguing that the behaviour was unfair to other businesses.
After decades of being trapped in a cycle of recession, emigration and underdevelopment, Ireland’s economic transformation in the late 1990s turned the country’s fortunes around, and a key factor was the significant increase in foreign direct investment (FDI), particularly by US multinationals that were attracted to Ireland by the 12.5 per cent corporate tax rate. Introduced in 1997, the rate was significantly lower than in other EU countries, giving Ireland a huge competitive advantage in attracting FDI.
Since then, Ireland has become home to more than 970 US companies, including Apple, and other tech giants including Microsoft, Dell, Yahoo, Facebook, IBM, Intel and many others have set up headquarters in Ireland. This reliance on foreign investment underscores the importance of maintaining a favorable tax environment for the tech industry.
Globally, corporate tax rates vary significantly from country to country. European countries are endeavouring to restructure their tax systems to ensure fairness and to prevent large multinational corporations from avoiding taxes through complex financial arrangements.
Such tax policies in Ireland, while contributing to economic development, have also raised questions about tax fairness in the international community. Over the past decade, Ireland’s corporate tax revenue has been growing very rapidly, mainly from five US companies Meta, Google, Apple, Pfizer and Intel.
This tax dispute between Apple and Ireland highlights the need for further harmonisation and improvement of international tax rules.
Irish government: forced to collect the money, how to spend it is a problem

During this period, Ireland also spent tens of millions of euros to lobby around, they do not want the money.
The reason for not wanting it is twofold: firstly, they are worried about destroying the attractiveness of investment in his multinational company, and secondly, they are worried that the windfall will increase inflation.
Ireland’s Department of Finance forecasts that this year’s tax revenues will reach 105.7 billion euros, an increase of 13.6 billion euros over previous estimates, mainly from corporate tax revenues and the European Court of Justice decision, 13 billion euros will increase Ireland’s already large budget surplus. Ireland’s fiscal regulator believes that the economy is already overheating because of too much government spending in the past, and if another €13bn is poured into the market, inflation will be the next thing to face.
- Currently, for this huge amount of tax money, the Irish government plans to use it for infrastructure development, including transport, education and health care and other areas, in order to enhance the overall competitiveness of the country.
- However, the People Before Profit Coalition is calling for the money to be used to address the housing crisis, particularly the building of social housing to combat the growing problem of homelessness in the country.
- In addition, a number of sectors, such as retail, are also fighting for the allocation of this money.
Considering the strong economic ties between Ireland and the United States, particularly in the technology sector, how the money is handled could also affect the relationship between the two countries.
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