On Tuesday, Apple begins an epic court battle with the EU, fighting the commission’s landmark order that the iPhone-making refund Ireland 13 billion euros ($ 14 billion) in back taxes.
The world’s biggest company’s lawyers will face EU officials in a Luxembourg court and they will be challenging a decision that CEO Tim Cook slammed at the time as “total political crap”.
In August 2016, the European Commission’s conclusion was delivered by Competition Commissioner Margrethe Vestager, a shock decision that put Europe at the forefront of an emerging effort to rein in the power of US big tech.
On Tuesday and Wednesday, will be the two days of hearings that will take place at the EU’s lower General Court. The judges will be providing their judgment no earlier than 2020. For the final decision that could land as late as 2021, any appeal would then go the EU’s highest court, the European Court of Justice.
Apple was accused by the EU of parking untaxed revenue earned in Europe, Africa, the Middle East, and India, in Ireland, which has emerged as a European hub for big tech and global pharma giants.
The opportunity gave Apple an advantage over other companies, allowing it to avoid taxes between 2003 and 2014 of around 13 billion euros which constituted illegal “state aid” by Ireland, said Brussels.
However, Apple has strongly denied the tax bill. The US government has also insisted the order by Brussels constitutes a major breach of international tax law. In 2016, Tim Cook said in an open letter, “The European Commission has tried to rewrite Apple’s history in Europe, to ignore Ireland’s tax laws and, in doing so, to disrupt the international tax system.”
The group insists that it is the US where the company invests in research and development and thus creates wealth, that it must pay taxes on the revenue in question. The California-based giant is supported in its fight by Ireland which has also appealed, refusing to be singled out as a tax haven.
On Friday, Irish Finance Minister Paschal Donohoe promised, “We will present a very strong case.”
The United States President Donald Trump accused Europeans of deliberately attacking American technology giants. The two days hearings are taking place in a tense trade context between the EU and the US.
The US president has accused the EU’s Competition supremo, Vestager of “hating” the US. He has condemned her as the “tax lady” because of the investigations and heavy fines imposed on the US group as Google.