Apple, Ireland win appeal of EU's demand for $15B in back taxes

July 15 (UPI) -- Ireland did not give U.S.-based tech giant Apple any unfair state aid, the European Union's second-highest court ruled Wednesday, nullifying the EU's demand for nearly $15 billion in back taxes.

In a highly anticipated decision, the General Court of the European Union in Luxembourg found in favor of Ireland, which had appealed the European Commission's contention that Dublin had handed out unfair tax benefits to Apple.

The ruling was viewed as a setback for EU efforts to counter efforts by member states to issue corporate tax breaks for competitive advantages.

The Commission has the option to appeal to the Court of Justice of the European Union, the bloc's highest court.

The EU executive in 2016 ordered Ireland's revenue service to recover the money from Apple, plus interest, amounting to nearly $15 billion. The move came as part of an effort to crack down on corporate tax avoidance across the bloc.

Ireland appealed the decision, portraying it as an attack on its sovereignty and claiming it gave no favorable treatment to Apple. The EU General Court agreed.

"By today's judgement, the court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage" given to Apple in contravention of EU rules, the court said.

Specifically, it disagreed with the Commission's claim that Ireland should not have regarded two Apple subsidiary units operating in Ireland, known as ASI and AOE, as "non-resident" for tax purposes.

"We welcome the judgment by the General Court of the European Union annulling the decision of the European Commission of August 2016, which alleged Ireland provided state aid to Apple," the Irish Department of Finance said in a statement.

"Ireland has always been clear that there was no special treatment provided to the two Apple companies -- ASI and AOE. The correct amount of Irish tax was charged in line with normal Irish taxation rules."