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.
Top Rated Comments
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!
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.
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.
I can’t even begin to understand this comment. Lol