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EU Court Annuls EU’s €13bn Irish Tax Bill On Apple

EU Court Annuls EU’s €13bn Irish Tax Bill On Apple
Apple has won a crucial tax case in the European Union.
A ruling by the second highest court of the EU ensured that the United State based tech giant   will not have to pay Ireland €13bn in back taxes.  
The tax ruling was imposed on Apple by the European Commission, which was a record for the EU, in 2016.
The Commission had not proved that Apple had broken competition rules and therefore its decision was annulled, said the EU's General Court while delivering the ruling.
This ruling comes as a huge blow for the plan of the EU to prevent alleged tax avoidance by top tech companies. It is now open to the Commission to approach the European Court of Justice, Europe's highest court, for an appeal against the ruling within the next 14 days.
"This case was not about how much tax we pay, but where we are required to pay it," Apple said in a statement. "We're proud to be the largest taxpayer in the world as we know the important role tax payments play in society."
The Irish government had "always been clear" Apple received no special treatment, it said. The Irish government had also appealed against the ruling. "The correct amount of Irish tax was charged... in line with normal Irish taxation rules," it said.
She would "study the judgment and reflect on possible next steps", said the EU Competition Commissioner Margrethe Vestager, who brought the case.
It is expected that there would be some relief among certain sections within Ireland because of the threat of overturning of the agreement that helped encourage Apple to invest in the country, has now been averted by the ruling.
However that apparently is not the universal sentiment. Describing the ruling to be a bad day for the Irish taxpayer, a Sinn Féin spokesman said that the latest ruling would draw negative attention to the international tax reputation of the country. 
This case represents the wider debate about whether largest of the tech and multinational companies end up paying as much taxes in Europe as they should. The ruling therefore came as  a setback for those who have demanded that multinationals in Europe should be paying more taxes.
While there is ongoing negotiations among governments to come to an agreement on new ground rules, there re some European countries that have taken unilateral measures, including Britain, to try and force some of the big tech companies to pay more taxes.  
The European Commission had previously alleged that Apple had been allowed by Ireland to attribute nearly all its EU earnings to an Irish head office which was actually present only on paper which aided the company to avoid paying taxes on revenues earned by it from the EU. This had prompted the EU to bring in the action. 
This constituted illegal aid given to Apple by the Irish state, the commission had argued.
The argument of the Irish government was that Apple should not be forced to repay the back taxes.

Christopher J. Mitchell

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