A European Union court on Wednesday ruled Apple does not have to pay nearly $15 billion USD in back taxes to Ireland.
Bloomberg reports that the European General Court determined European Commission officials failed to demonstrate that Apple had gained an unfair competitive advantage through the Irish tax laws.
Following a lengthy investigation, the commission had previously issued a finding that Apple had massively reduced its tax bills by overstating the amount of its business in Ireland, where it received low tax rates. The commission had ordered the company to reimburse Irish authorities up to $15 billion USD.
In a ruling issued this morning the court stated:
By today’s judgment, the General Court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU.
According to the General Court, the Commission was wrong to declare that ASI and AOE (Apple Sales International and Apple Operations Europe) had been granted a selective economic advantage, and by extension, state aid.
The court said that it came to this decision because the European Commission “did not succeed in showing to the requisite legal standard that there was an advantage” gained by Apple’s operations receiving the equivalent of State aid or better treatment than other companies.
“Although the General Court regrets the incomplete and occasionally inconsistent nature of the contested tax rulings, the defects identified by the commission are not, in themselves, sufficient to prove the existence of an advantage,” it said.
It’s expected that the European Commission will now appeal the judgement to the higher European court and will have two months to do so.
The decision represents a big win for Apple, which has always denied any wrongdoing. It’s also a setback for European leaders who have built a platform on policing tech companies.