Apple Says EU-Ireland Tax Order 'Defies Reality and Common Sense'

Apple on Tuesday argued that the European Union's order for it to pay 13 billion euros ($14.3 billion) in back taxes to Ireland "defies reality and common sense," as it kicked off its legal challenge against the ruling.


According to Reuters, Apple also said the European Commission was using its powers "to retrofit changes to national law," which would create legal uncertainty for businesses.

Apple sent a six-person delegation led by its CFO Luca Maestri to the two-day court hearing taking place over Tuesday and Wednesday in Luxembourg. The company is arguing the same case that CEO Tim Cook made in a public letter about the tax ruling three years ago; namely, that Apple follows the law and pays all the taxes it owes in every country where it operates, including Ireland.

Apple also argues that nearly all of its research and development takes place in the United States, which is where the company pays the majority of its taxes.
"The Commission contends that essentially all of Apple's profits from all of its sales outside the Americas must be attributed to two branches in Ireland," Apple's lawyer Daniel Beard told the court.

He said the fact the iPhone, the iPad, the App Store, other Apple products and services and key intellectual property rights were developed in the United States, and not in Ireland, showed the flaws in the Commission's case.

"The branches' activities did not involve creating, developing or managing those rights. Based on the facts of this case, the primary line defies reality and common sense," Beard said.

"The activities of these two branches in Ireland simply could not be responsible for generating almost all of Apple's profits outside the Americas."
In 2016, the European Commission found Apple received illegal state aid from Ireland. Apple and Ireland both appealed the ruling, but the European Commission opened litigation against Ireland in October 2017 for its failure to procure Apple's back taxes, and Apple has already almost finished paying the back taxes it owes. If the order is overturned, the money will be returned to Apple.

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5 weeks ago
Apple should pay. We customers pay premium prices and Apple should pay their premium tax tbh. Ireland could benefit so much from the tax money and also other countries as well.
Rating: 18 Votes
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5 weeks ago
Really Apple? Sorry but I also think paying just 0.005% tax ‘defies reality and common sense’!

It’s also a disgusting slap in the face of everyone else in society paying for your shortfall in taxes!

It was a clear breach of EU tax laws and EVERYONE knew it!
Rating: 15 Votes
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5 weeks ago

Really Apple? Sorry but I also think paying just 0.005% tax ‘defies reality and common sense’!

It’s also a disgusting slap in the face of everyone else in society paying for your shortfall in taxes!

It was a clear breach of EU tax laws and EVERYONE knew it!


Some of our American friends think otherwise, just look at the comments here and in former articles concerning this topic.
Most of them seem to be misinformed.
The EU slapped more fines on companies such as Microsoft and Google, did they ever overturn those fines...Nope.
Now only if the EU would do the same to Facebook, matter of time...not if.
I really don't get it why some of our American friends are so hardheaded on this topic, they are or misinformed or just think the EU needs more money, amongst other reasons.


Ireland is in the EU, they must abide by EU law, you can not give preferential treatment to a company (State sponsoring), that's unfair for others, therefor Apple has to pay the tax other company pays, they clearly did not.
Rating: 8 Votes
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5 weeks ago
'Defies Reality and Common Sense'....that's ritch
Rating: 6 Votes
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5 weeks ago

Some of our American friends think otherwise, just look at the comments here and in former articles concerning this topic.
Most of them seem to be misinformed.
The EU slapped more fines on companies such as Microsoft and Google, did they ever overturn those fines...Nope.
Now only if the EU would do the same to Facebook, matter of time...not if.
I really don't get it why some of our American friends are so hardheaded on this topic, they are or misinformed or just think the EU needs more money, amongst other reasons.


Ireland is in the EU, they must abide by EU law, you can not give preferential treatment to a company (State sponsoring), that's unfair for others, therefor Apple has to pay the tax other company pays, they clearly did not.


People on here who defend Apple clearly have never dealt B2B with them, they are both aggressive and razor sharp. They know what they are doing business wise and happy to use their enviable position to further serve and benefit themselves.

Fact is they entered into this deal and should have (and most definitely would have) always known that the EU might come a knocking, as this breaches their law. That really is the end of discussion. There is no defence, other than of course that from the ever faithful ADL.
Rating: 6 Votes
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5 weeks ago

People can voluntarily pay for those things


Lol. Lol.

I can’t even begin to understand this comment. Lol
Rating: 4 Votes
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5 weeks ago
All lies. Does anyone believe apple sold $3 trillion of stuff in Ireland? With 0 apple retail stores. It is obvious the world is out to punish apple.
Rating: 4 Votes
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5 weeks ago


Are tax laws really being applied retroactively, or is complaining about "retrofit changes to national law" just a fancy way of saying Apple should get away with it because it took a long time to catch them?


It comes down to the fact that in the EU, certain national laws are themselves illegal. This is something you will see studiously avoided in Apple statements, where they would have you think 'Irish national law' is the highest law in the land. And it sort-of isn't...

There is no EU tax law, other than treaties which require member nations to impose standardised tax laws. The law Ireland was applying was found to be illegally non-standard in order to benefit Apple. As a remedy for the illegal law, Ireland were required to apply standardised tax law and collect back taxes. Apple hasn't been accused of breaking any law, retroactively or otherwise (so their protest about behaving legally are just PR theatre), but they did benefit from an illegal scheme. They haven't been fined or charged with anything, they just been made to pay their back taxes to Ireland. They can complain the law has changed, which it technically has, but it hasn't been changed arbitrarily or as part of a shakedown. It only 'changed' to what the law was legally required to be at the time. It comes down to how an illegal law should be remedied, which is a tricky legal question for lawyers, let alone us.

IMO, if Apple were genuinely ignorant of the illegal tax rates then I would understand the indignation, but as we are seeing in court, they have an army of very good tax lawyers. Like that case recently where a couple found $100,000 erroneously in their bank account, and spent it in days, Apple knew exactly what they were doing, and hoped to play the victim card if it ever came to court.
Rating: 3 Votes
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5 weeks ago
Apple is scared they will need to open up their books. At one point nearly all, if not all non US sales were routed through Ireland. They have been caught out not filing securities reports in multiple jurisdictions. And they knew the Irish deal was not “kosher” when they entered into it.
They can cry all they want, but the only chance f not paying will Contesting the invoice from the Irish tax dept.
Rating: 2 Votes
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5 weeks ago

Taxes are theft


Who is gonna pay for infrastructure/education/security/safety....
Rating: 2 Votes
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