EU Court's Decision on Apple Tax Case Could Impact Multinationals

The EU’s top court will decide if Apple owes €13bn in back taxes. This case began in 2016 when Margrethe Vestager, the EU competition chief, claimed Apple received unfair tax benefits from Ireland. Due to these benefits, Apple paid a tax rate of 0.005% in 2014. Vestager ordered Ireland to collect the money.

In 2020, a lower EU court sided with Apple, stating that the EU failed to prove Apple gained an unfair advantage. Vestager appealed, and now the highest EU court will make the final ruling.

Vestager’s firm stance on tax agreements made her a pivotal figure in EU competition policy. She is stepping down from her position this year. Not all her decisions have been upheld in court—cases involving Fiat and Amazon were overturned.

A senior court lawyer suggested the 2020 Apple ruling was flawed and should be reconsidered. The final decision could impact how EU countries offer tax deals to multinational corporations.

Fiona Scott Morton, an economist, argues that EU countries should compete on public services rather than tax breaks. She believes if the EU loses this case, new laws to prevent tax competition may be introduced.