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Apple wins appeal against $14.9 billion EU tax bill

The bill, which Tim Cook once called "political crap," has been overturned by Europe's second highest court.

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Apple might not have to pay its giant tax bill after all.

Jaap Arriens/NurPhoto via Getty Images

Apple was a handed a victory on Wednesday as it won the appeal against the tax bill of 13 billion euros ($14.9 billion) handed down by the European Commission in 2016. The decision came from the EU's second highest court, which heard the case last September.

Apple's mammoth tax bill was the result of a two-year antitrust investigation by Europe's Competition Commission, which was investigating whether the company had paid enough tax in Ireland where it has its European headquarters. Competition Commissioner Margrethe Vestager said that the company had paid such little tax in the country, which draws many US tech companies due to its favorable tax laws, that it amounted to "illegal state aid."

Both Ireland and Apple protested the fine, with the company's CEO Tim Cook dismissing it as "political crap" and promising to appeal. The hearing for the appeal took place last year, with Europe's General Court ultimately ruling this week that Apple hadn't broken EU competition law.

In a statement on Tuesday, Apple thanked the court for its time and said it was "pleased" with the outcome.

"This case was not about how much tax we pay, but where we are required to pay it," said a company spokesman. "We're proud to be the largest taxpayer in the world as we know the important role tax payments play in society." He added that Apple had paid more than $100 billion in corporate incomes taxes around the world in the last decade, as well as ten of billions in other taxes. 

International tax on digital companies is currently undergoing reform thanks to efforts by the OECD, which is working towards a solution that will see taxes split more evenly between different countries. This will be particularly welcome in Europe, where countries including France and the UK are currently in the process of introducing their own digital taxes in order to make up for what they consider to be a shortfall. 

"Changes in how a multinational company's income tax payments are split between different countries require a global solution, and Apple encourages this work to continue," said the Apple spokesman.

In September 2018, Apple transferred the 13 billion euros into an escrow account, where it will stay until the conclusion of the appeals process. Apple might have won this appeal, but the Competition Commission could appeal further at the European Court of Justice, Europe's highest court, which would have final say on the matter.

"We will carefully study the judgment and reflect on possible next steps," said Vestager in a statement. "The Commission stands fully behind the objective that all companies should pay their fair share of tax."