海角大神

A European Union court on Wednesday delivered a hammer blow to the bloc鈥檚 attempts to rein in multinationals鈥� ability to strike special tax deals with individual EU countries when it ruled that Apple does not have to pay $15 billion in back taxes to Ireland.

The 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 the EU鈥檚 General Court said Wednesday that 鈥漷he Commission did not succeed in showing to the requisite legal standard that there was an advantage.鈥�

鈥淭he Commission was wrong to declare鈥� that Apple 鈥渉ad been granted a selective economic advantage and, by extension, state aid,鈥� said the Luxembourg-based court, which is the second-highest in the EU.

The EU Commission had ordered Apple to pay for gross underpayment of tax on profits across the European bloc from 2003 to 2014. The 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 the bulk of their revenue across the EU鈥檚 27 countries in the one EU country where they have their regional headquarters. For Apple and many other 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 them. The net result, however, is that the companies often end up paying very low tax.

The ruling can only be appealed on points of law and the Commission Vice President Margrethe Vestager said she will 鈥渞eflect on possible next steps.鈥�

The Irish government welcomed the ruling, saying 鈥渢here was no special treatment provided鈥� to the U.S. company. Apple likewise said it was pleased by the decision, arguing that the case is not about how much tax it pays, but in what country. Apple CEO Tim Cook had earlier called the EU demand for back taxes 鈥渢otal political crap.鈥�

The ruling is an especially stinging defeat for Ms. Vestager, who has campaigned for years to root out special tax deals and better regulate the power of the big U.S. tech companies, including Google, Amazon, and Facebook. Mr. Trump has referred to her as the 鈥渢ax lady鈥� who 鈥渞eally hates the U.S.鈥�

Despite the setback, she vowed to carry on the fight. 鈥淭he Commission will continue to look at aggressive tax planning measures under EU state aid rules to assess whether they result in illegal state aid,鈥� she said.

Besides the tax case, Ms.聽Vestager has recently opened聽two antitrust investigations聽into Apple鈥檚 mobile app store and its payments operations. Under her leadership, the EU has also聽investigated and fined tech giants聽like Google for billions of dollars for abusing their dominant market position. Some EU countries are looking to impose a聽tax on major digital businesses.

The European Network on Debt and Development, a group that seeks to make the financial system fairer, said that Wednesday鈥檚 court ruling showed how tough any tax policy remains. 鈥淚f we had a proper corporate tax system, we wouldn鈥檛 need long court cases to find out whether it is legal for multinational corporations to pay less than 1% in taxes,鈥� said Tove Maria Ryding, a policy manager at the group.

Even though taxation remains under the authority of its member countries, the EU is seeking to create a level playing field among the 27 nations by making sure special deals 鈥� including ultra-low tax rates with multinationals 鈥� are weeded out.

Wednesday鈥檚 ruling will hurt that.

EU Greens legislator Sven Giegold said the verdict 鈥渋s a huge setback in the fight against tax dumping in Europe.鈥� He said EU rules 鈥渁re clearly totally insufficient to tackle the problem. This must be a wakeup call.鈥�

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

鈥淚n times like these, when we are passing multibillion-euro economic stimulus packages, we cannot afford to waste a single cent in tax revenue,鈥� said EU legislator Markus Ferber of the 海角大神 Democrat EPP Group.

This story was reported by The Associated Press.

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