TECH Apple embarks on EU court battle over 13-bn-euro tax bill

TECH

Apple embarks on EU court battle over 13-bn-euro tax bill

AFP

10:26, September 17, 2019

Apple embarks on an epic court battle with the EU on Tuesday, fighting the commission's landmark order that the iPhone-maker reimburse Ireland 13 billion euros ($14 billion) in back taxes.

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File photo: AFP

Lawyers for the world's biggest company will face EU officials in a Luxembourg court, challenging a decision that CEO Tim Cook slammed at the time as "total political crap".

The European Commission's conclusion was delivered in August 2016 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.

The two days of hearings on Tuesday and Wednesday will take place at the EU's lower General Court, where judges will give their judgement no earlier than 2020.

Any appeal would then go the EU's highest court, the European Court of Justice, for a final decision that could land as late as 2021.

The EU accuses Apple 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.

This privilege allegedly gave Apple an advantage over other companies, allowing it to avoid taxes between 2003 and 2014 of around 13 billion euros which, according to Brussels, constituted illegal "state aid" by Ireland.

Apple fiercely denies the tax bill. The US government also insists the order by Brussels constitutes a major breach of international tax law.

"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," Tim Cook said in an open letter in 2016.

The group insists that it is in the United States, where the company invests in research and development and thus creates wealth, that it must pay taxes on the revenue in question.

This became possible after a major tax overhaul in the US at the end of 2017 that allowed Apple to repatriate profits made abroad. Apple has promised to pay Washington a tax bill of $37 billion, in addition to the taxes already paid in the United States.

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