Technology giant, Apple has challenged a $14 billion tax charge from the European Commission. The Commission had accused the company of paying taxes at a low rate to the Irish Government between 2003 and 2014.
The backstory: The EU commissioner, Margrethe Vestager ordered Apple in 2016 to pay back $14.3 billion to Ireland. The tax was levied on Apple because Ireland reportedly had cut deals over the years that allowed Apple to avoid Ireland’s 12.5% corporate tax and instead pay rates as low as 0.005%. This is why Apple was asked to pay up.
How it happened: The profits from Apple purchases made in Europe were legally transferred to Apple’s subsidiaries – Apple Sales International and Apple Operations Europe, meaning taxes were paid in Ireland at the low rate, instead of being paid to the country where iPhones, MacBooks, iPad sales were bought.
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Apple’s response: However, Apple has replied, claiming it is the largest taxpayer in the world and has denied wrongdoing. The CEO, Tim Cook even called the case a political crap while appealing the order though Vestager and EU still argued that Ireland’s favouritism allowed the iPhone maker to save $14.3 billion in taxes between 2003 and 2014.
Meanwhile, the United States has been critical about the E.U case brought up against Apple, saying the company should not be subjected to the Irish rules but the U.S rules instead. This has not changed the situation as the court denied U.S. officials’ request to intervene in the tax challenge.
The iPhone maker is expected to send a six-man delegation headed by Chief Financial Officer, Luca Maestri to the two-day court hearing at the Luxembourg-based General Court, the EU’s second-highest court.
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Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services.