The EU has ordered Apple Inc (NASDAQ:AAPL) to pay around $14.3 billion in back taxes owed to Ireland. The company has however challenged the tax charge from the EU escalating a tax fight between the EU regulator and the iPhone maker.
Apple benefited from illegal tax benefits
In 2016, the company received an order from the EU Competitions Commission requiring it to pay back $14.3 billion in taxes to Ireland. The commission said that the company had benefitted from “illegal” tax benefits in over two decades after it paid a tax rate of 0.005% for 2014. Apple lawyers have said that the EU is trying to get headlines by quoting such figures. The Irish government and the company have appealed the order, and Apple CEO Tim Cook described the order as “total political crap.”
On Tuesday representative from the EU, Ireland and Apple appeared before the EU General Court in Luxembourg for legal proceedings. Apple CFO Luca Maestri led a six-person delegation to the hearing.
One of Apple’s lawyers, Daniel Beard stated that the EU contends that all of the company’s profits outside the US should be attributed to two branches in the European country. Beard pointed out that all the development of the company’s products occurs in the US and attributing profits to the European headquarters in Ireland was unfair. Last year the company paid $0.00 in federal tax in America even after it racked a profit of $11.2 billion.
The US critical of the EU tax laws
The EU court in 2018 denied a request by US officials to intervene in the tax challenge. The US has been critical about the EU order indicating that American firms should be subject to American tax laws. President Trump, in particular, has been critical of EU Commissioner Margrethe Vestager calling her Europe’s “tax lady.” Vestager has made her name through her touch stance against US tech companies such as Google and Apple was at the beginning of this month granted another five-year term.