Apple Fights EU Over €13 Billion Back Taxes
Apple has launched a legal challenge to the European Commission over an order to pay 13 billion euros (AUD 20.882 billion) in Irish back taxes.
The tech giant is challenging an August 2016 ruling by the Commission claiming Irish tax rulings in 1991 and 2007 had artificially reduced its tax burden over two decades.
The European Competition Commissioner Margrethe Vestager referred to a 0.005% tax rate paid by Apple’s central unit in Ireland in 2014 as a prime example of the unusually low tax payments.
Forbes has reported this was done through two Apple subsidiaries, whereby profits from Apple purchases made in Europe were legally transferred to these subsidiaries.
This process allowed Apple to pay taxes at a much lower rate compared to Ireland’s 12.5% corporate tax.
According to Reuters, a six-man delegation is expected to attend the two-day court hearing at the Luxembourg-based General Court, the EU’s second-highest court.
Led by Chief Financial Officer Luca Maestri, Apple will argue no tax regulations were broken under both US and Irish Law.
Ireland is also challenging the ruling, accusing the Commission of exceeding its powers and interfering with an EU member’s national sovereignty over tax affairs.
Multinational companies employ around 10% of the country’s workforce, with its tax regime a key attraction for the likes of Apple.
The landmark case comes after the General Court dismissed the Commissions ruling against a Belgian tax break that benefited over 30 multinationals, including BP.