If you weren’t in the festive holiday spirit already, Apple is launching its legal challenge this week to oppose a 13 billion euro charge levied on the company in August by the EU Commission for supposed illegal tax benefits from Ireland.
Apple will argue that the EU ignored tax experts and disregarded corporate law. Bruce Sewell, Apple SVP, said that the company was targeted to ‘generate lots of headlines’ in a statement.
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Apple claims that the EU picked a particular accounting process to maximize the bottom line penalty rather than follow due legal course. A core part of the EU Commission’s argument is ‘non-residency’; the notion that Apple created empty shell companies to avoid tax that were not otherwise used.
Apple says this is ridiculous and was chosen merely to make the penalty as large as possible. Sewell says that two other options would have been closer to the reality (although Apple will no doubt have disputed) but produced much lower numbers than the alleged 13 billion euro punishment.
Here’s how Sewell explains why Apple Sales International is not a company of non-residency:
“So when Tim Cook, who is the CEO of our company, makes decisions that impact ASI, the Commission says we don’t care because he is not an ASI employee, he is an Apple Inc employee. But to say that somehow Tim Cook can’t make decisions for ASI is a complete mis-statement of corporate law, it’s a misunderstanding of how corporations operate,” he said.
Apple says that Apple Sales International does not create intellectual property or any engineering work. Therefore, it is inappropriate to attribute more tax to its Ireland operations.
Sewell said that Apple hopes Donald Trump’s administration will introduce tax reform to counter tax avoidance. In addition to Apple’s legal battle, Ireland is also appealing the decision as they claim enforcing the payment would violate their own laws.
The legal battle over this case is likely to take years.