EU will reflect on next steps after Apple ruling

A European Union court on Wednesday delivered a hammer blow to bloc’s attempts to rein in multinationals' ability to strike special tax deals with individual EU countries when it ruled that Apple does t have to pay 13 billion euros (15 billion US dollars) in back taxes to Ireland.

EU Commission had claimed in 2016 that Apple had struck an illegal tax deal with Irish authorities that allowed it to pay extremely low rates. But EU's General Court said Wednesday that ” Commission did t succeed in showing to requisite legal standard that re was an advant.”

" Commission was wrong to declare” that Apple “had been granted a selective ecomic advant and, by extension, state aid,” said Luxembourg-based court, which is second-highest in EU.

EU Commission had ordered Apple to pay for gross underpayment of tax on profits across European bloc from 2003 to 2014. commission said Apple used two shell companies in Ireland to report its Europe-wide profits at effective rates well under 1%.

In many cases, multinationals can pay taxes on bulk of ir revenue across EU's 27 countries in one EU country where y have ir regional headquarters. For Apple and many or big tech companies, that is Ireland. For small EU countries like Ireland, that helps attract international business and even a small amount of tax revenue is helpful for m. net result, however, is that companies often end up paying very low tax.

ruling can only be appealed on points of law and Commission Vice President Margre Vestr said she will "reflect on possible next steps.”

ruling is an especially stinging defeat for Vestr, who has campaigned for years to root out special tax deals and better regulate power of big U.S. tech companies, including Google, Amazon and Facebook.

ruling comes at a time when tax income for EU nations is taking a hit because of recession triggered by coronavirus pandemic. With households under financial pressure, EU wants to make sure multinationals making profits on continent pay ir fair share, too.

(Im Credit Pixabay)