The ECJ ruling means Ireland will have to recover the lost taxes from Apple – something Dublin has spent years of legal wrangling trying to avoid.
The Irish government has argued that Apple should not have to repay the back taxes, deeming that its loss was worth it to make the country an attractive home for large companies.
Ireland, which has one of the lowest corporate tax rates in the EU, is Apple’s base for Europe, the Middle East and Africa.
Although corporation tax rates for businesses are set nationally, and are not subject to the EU’s jurisdiction, the trade bloc does have extensive powers to regulate state aid and in this case, it argued that by applying very low tax rates to Apple, Ireland was granting it an unfair subsidy.
The latest decision is a colossal victory for the European Commission in its attempts to stop big companies bending the rules.
The Irish government said the issue in the Apple case was “now of historical relevance only” and said the process of transferring assets to Ireland would now begin.
Tove Maria Ryding from the European Network on Debt and Development, an association of trade unions and non-governmental organisations, welcomed the ECJ’s decision but stressed “our tax problem is more than just one rotten apple”.
She said the case addressed tax matters dating back over 20 years and was “a perfect illustration of the chaotic corporate tax system we have”.
“What we urgently need is a fundamental reform that can give us a tax system that is fair, effective, transparent and predictable,” she said.