Apple Inc. said that it would take on the European Commission through a legal challenge as it has been ordered to pay 13 billion euros in Irish back taxes. The commission has been actively targeting multinational companies for potential tax avoidance.
It is expected that the company will send a delegation of 6 men to the General Court based in Luxembourg. The delegation would be led by Luca Maestri, the iPhone maker’s Chief Financial Officer.
The European Commission claims that Ireland’s tax rulings in 1991 and 2007 had decreased the tax obligation of Apple for over 20 years artificially. This, the commission believes, makes it illegal state aid.
In order to support the tax avoidance case against Apple, Margrethe Vestager, European Competition Commissioner, said that the company’s Irish unit paid taxes at a rate of only 0.005 percent.
As a fightback, it is anticipated that Apple would stand by their belief that the company was not wrong on its part as it was moving in accordance with tax laws of the United States and Ireland. This comes as the company presented similar views against a tax ruling by the European Union two years ago.
The company also believes that its tax obligations are more towards the United States than Ireland. This is because most of the products’ value like engineering, design and development is produced in the US.
Ireland is also taking on the European Union’s ruling over taxation as the country believe that the commission is taking actions beyond its powers and is hurting the national sovereignty of the country in regards to tax matters. Multinational companies, which employ 10 percent of the workforce of Ireland, find the country’s taxation policies a significant attraction.
According to reports, Poland is in support of the Commission whereas Luxembourg has shown support for Ireland in relation to the case.