The Memo: 'Sweetheart' deal no more: EU court rules that Apple must pay its €13bn tax bill

The lengthy saga over a so-called ‘sweetheart’ deal has come to an end. After eight years, the European Court of Justice (ECJ) has ruled that the European Commission has the right to demand right to demand €13bn in back taxes over illegal tax breaks for Apple in Ireland. The European Commission had in 2016 accused Apple of illegal receiving tax advantages from the country, but this ruling was later overturned in 2020. This most recent decision, according to the ECJ, “confirms the European Commission’s 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover.” 

Apple's European headquarters has been based in Cork since 1980, and this dispute covers activity between 1991 and 2014. During this time, the tech giant reportedly benefitted from Irish authorities’ tax arrangements, which were not available to other companies. This means Apple effectively paid a tax rate of 0.005%, yet the global minimum tax rate (which has been agreed by more than 140 countries) stands at 15% of corporate profits. 

This decision can be seen as part of the larger trend of EU actions to address the relationships between companies and its members. In fact, this ruling took place at the same time the ECJ upheld a €2.4bn EU competition fine against Google for abusing its market power by favouring its own shopping services ahead of rivals'.