Apple: European Commission doesn’t understand our business

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Apple is more valuable than it’s ever been
The EU wants to tax Apple more money. Apple doesn't want to be taxed more.
Photo: 401(K) 2012/Flickr CC

Apple says that the European Commission doesn’t understand its business — and places way too much emphasis on the importance of its Irish divisions.

The accusation was made on the second day of Apple’s court hearing to appeal its $14.4 billion tax bill.

The EU handed Apple its giant tax bill in August 2016. It claimed that the company took advantage of illegal state aid that allowed it to route profits through Ireland. The investigation alleged that Apple paid the equivalent of as little as 0.005 percent on all European profits in 2014.

But Apple’s lawyers say that Ireland’s importance is being overstated. A Reuters report notes that:

“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 U.S. Senate hearing in 2013 which formed a key element of the Commission’s case.”

Apple has invited EU officials to visit its Cork operation. But Commission lawyer Paul-John Loewenthal says that this would not be necessary. “What would a site visit accomplish?” he asked. Apple changed its tax structures for its two Irish businesses in 2015.

Apple has already paid its giant tax bill, although it hopes to get this money back. This was paid into an escrow fund, where it will be stored until the case reaches its conclusion. (The fund actually lost money last year, bringing its total value down by $18 million.)

The hearing will be over today. But a court ruling on the matter is likely to take months. Whatever the verdict, this will play a significant part in growing demands to reform tax structures for multinational companies.