Over the past few years, European taxes have become a serious issue to debate over. In the year 2016, the European Commission accused Apple of being benefited from illegal tax in Ireland for its European operations. The European Commission stated that Ireland has been aiding Apple illegally and now it must recover $14.5 billion.
European Commissioner, Margrethe Vestager, gave a statement that Ireland has granted Apple with tax benefits which is an illegal act and quite unfair for other companies headquartered in Ireland. Apple has paid substantially fewer taxes for many years as compared to other businesses in Ireland. Apple Sales International (ASI) and Apple Operations Europe (AOP), the two subsidiaries of Apple in Ireland, have attributed a major part of their profit to a head office which only exists on papers. ASI and AOP are not giving tax which lowers the effective tax rate to a great extent.
The case has been there since 2016 but now Apple and Ireland have won the appeal because the commission didn’t succeed in proving the advantage that is given by Ireland to Apple. No legal basis was found behind this argument. The general court has declared the commission’s argument wrong because the commission couldn’t provide legal evidence against ASI and AOP for taking state aid from Ireland.
“The European Commission gave an argument that Apple has been operating its two subsidiaries ASI and AOP in Europe and they attribute all the profit to their head office which doesn’t even exist. This claim has no basis in law”, said Tim Cook, Apple CEO.
The Executive Vice President, Margrethe Vestager, stated that the commission will carefully study the judgment of the court and what to do next will be reflected after that. He said that the commission is not ready to think about the objective that all business companies should pay their fair share of tax. The member states should not give selective companies any tax advantage.
A spokesperson said that they are thankful that the General Court has given their precious time and concentration to think about the fact and has annulled the commission’s case.
Apple and Ireland, thus, won the appeal and the European Commission has lost their argument that Apple’s Ireland-based subsidiaries take tax aid from Ireland, and are not giving taxes.