Apple Must Pay 13 Billion Euros to Ireland in Back Taxes: Margrethe Vestager Vindicated

Name: Apple Must Pay 13 Billion Euros to Ireland in Back Taxes: Margrethe Vestager Vindicated (English version)
SKU: IN1743

Bennedsen, Morten; Roulet, Alexandra; Stabile, Mark; Henry, Brian

Product #:IN1743

Supplier:INSEAD

Discipline:Finance

Setting:Europe

Details:Case (PDF) • 12 pages • 2021-03-10 (Rev: 2025-05-05)

Subjects:

Economics Finance and investing

Geography:

Europe

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$12.40

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This case caps the long-running civil dispute over Ireland's illegal state aid to Apple Inc. In September 2024, the European Union Court of Justice ruled that Apple must pay Ireland 13 billion euro in back taxes. This was a victory for the outgoing Commissioner of Competition, Margrethe Vestager, who had steadfastly fought for this outcome in the face of adversity. At one point in the 10-year-long lawsuit, President Trump tried to sway the outcome in Apply's favour by insulting Commissioner Vestager for her adherence to the legal application of fair taxes on corporate profits. While the European Union has never officially deemed Ireland a tax haven, this still did not prevent Vestager from focusing her laser-like attention on the illegal state aid granted to Apple over a period 10 years in the form of a corporate tax rate that amounted to 0.005% in 2014.

Learning Objectives

The case is designed to encourage students to think about the role of international tax policy from the perspective of host countries trying to attract foreign direct investment. Where these multinationals are taxed and how much taxes they should pay to the foreign countries where their products are sold has become a particularly controversial issue with the emergence of the American tech giants. Students will be asked to reflect on the tax directives and policies of the European Union as well as the international corporate tax agreements fostered by the OECD. Students can discuss how host countries can create a fair tax climate to encourage the tech giants to make sustainable investments with the aim of creating thousands of jobs as was the case with Apple in Ireland.