EU: Apple spars with Brussels as US$14B Irish tax dispute continues

Apple accused the European Commission of misunderstanding its business on day two of the iPhone maker’s appeal against a US$14 billion tax order on Wednesday, September 18,  reported Reuters. 

The case centers on tax rulings granted by Ireland to two Apple businesses in the country: Apple Sales International and Apple Operations Europe. The rulings reduced Apple’s tax burden for more than two decades, to as low as 0.005% in 2014, according to the Commission. 

The Commission ordered the US company in 2016 to pay €13 billion (US$14.4 billion) of taxes it stated were owed to Ireland. But Apple and Ireland, whose economy benefits from hosting a number of multinational firms, are appealing against the decision at Europe’s General Court, its second highest.

Central to the dispute is the importance of the Irish businesses, with Apple lawyer Daniel Beard arguing on Wednesday they were not as significant as the Commission has asserted.

“Yes, Apple CEO Tim Cook said there were decisions taken in Ireland, but not strategic decisions,” he said, referring to Cook’s testimony at a US Senate hearing in 2013 which formed a key element of the Commission’s case. 

Apple did not do a special Irish tax deal in return for creating jobs, Beard added. 

“The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence, it is wrong. There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules,” he said in his closing argument. 

Ireland’s lawyer, Paul Gallagher, said the EU executive had failed to prove its case and tarnished the country’s reputation. 

“They haven’t shown one company which has been treated less favorably than Apple. This is Ireland’s reputation which has been so severely criticized,” he said. 

Commission lawyer Paul-John Loewenthal rejected criticism that the EU executive had not taken up Apple’s offer to visit its operations in Cork, Ireland, saying this was not necessary. 

“What would a site visit accomplish?” he asked. 

The case is about Apple’s Irish tax deal and has nothing to with the mismatch between tax regimes in different countries or US deferred tax rules, Commission lawyer Richard Lyal said in closing remarks.

Full Content: Reuters

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