The Apple Ruling Is a Setback for Multinational Tax Dodgers

The European Court of Justice has ordered Apple to pay €13 billion in back taxes to the Irish state. Apple’s long history of creative accounting is an object lesson in how the world’s biggest firms manage to shrink their tax bills.

New Apple Store Opens In Kuala Lumpur

An Apple store in Kuala Lumpur, Malaysia, on June 20, 2024. (Annice Lyn / Getty Images)


Ireland’s economy has had an interesting few months. In July, the Central Statistics Office (CSO) announced that the country’s GDP had surged by 26 percent in 2015. The statistic, widely lampooned in the international press, led Paul Krugman to criticize Ireland for its “leprechaun economics.”

But stranger things were on their way. On August 30, European Union competition commissioner, Margrethe Vestager, delivered a long-awaited decision regarding Irish state aid to multinational giant Apple. It found that the Irish tax commissioners had damaged competition by providing Apple state aid in a sweetheart tax deal.

Apple had paid Ireland’s generously low corporate tax rate of 12.5 percent on its domestic activities and sales. In return, however, Ireland allowed the company to book profits made in other parts of the world to a second company regarded as “stateless” and not required to pay any tax.

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