Apple appeals €13 billion tax payment demanded by EU
September 17, 2019
Tech giant Apple is appealing a 2016 EU ruling requiring that it pays a record €13 billion in back taxes in Ireland. Apple says the ruling "defies common sense." Unusually, Ireland doesn't want the extra tax revenues.
US tech giant Apple has launched an appeal to a European Commission 2016 ruling that they must pay a record €13 billion ($14 billion) in back taxes in Ireland.
The two-day hearing began on Tuesday at the General Court in Luxembourg, Europe's second-highest court.
Apple said that the order to repay taxes "defies reality and common sense."
Ireland is also challenging the court's decision, even though the money would be an extra tax take for the country. Dublin has enjoyed a boost to its economy in recent years as multinational corporations are attracted by the low tax rates in the country and is seen as unwilling to accept a ruling suggesting that its tax laws are too lax.
The 2016 ruling, pushed through by European competition commissioner Margarethe Vestager, claimed that the tech firm benefited from illegal state aid owing to two Irish court decisions which allegedly artificially reduced Apple's tax burden.
Vestager has also led campaigns against so-called "sweetheart multinational deals" formed between EU states and corporations such as Starbucks, Amazon and Fiat.
Are tech giants out of control?
"The commission contends that essentially all of Apple's profits from all of its sales outside of the Americas must be attributed to two branches in Ireland," Apple's lawyer Daniel Beard told the court on Tuesday.
Apple also claimed that it is now the largest taxpayer worldwide, paying an average global tax rate of 26%. The company also pointed out that all the intellectual activities and technological developments took place in the USA.
But commission lawyer Richard Lyal told the court: "To a large extent that is perfectly correct and perfectly irrelevant."
Apple's chief financial offer, Luca Maestri, is leading the delegation of six from Apple.
The court is expected to rule in the course of the coming months, but the losing party may appeal whatever decision is made to the European Court of Justice.
As such, a final judgment about the tax payment may still be several years away.