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Apple to Appeal EU Tax Ruling This Week – Calls Itself a ‘Convenient Target’

Apple to Appeal EU Tax Ruling This Week – Calls Itself a ‘Convenient Target’

Apple will file an appeal this week of the European Commission’s ruling that it must pay Ireland up to $13.8 billion (13 billion euros) in back taxes. Apple general counsel Bruce Sewell says the Cupertino firm “is a convenient target because it generates lots of headlines.”

Apple to Appeal EU Tax Ruling This Week - Calls Itself a 'Convenient Target'


Apple intends to lodge an appeal against the Commission’s ruling at Europe’s second highest court this week, its General Counsel Bruce Sewell and Chief Financial Officer Luca Maestri told Reuters in an interview at the company’s global headquarters in Cupertino.

EU regulators ruled in August the Apple had received improper tax benefits from Ireland, which allowed it to pay substantially less than other companies. Apple’s European headquarters are based in Ireland.

The iPhone and iPad maker was singled out because of its success, Sewell said.

“Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines. It allows the commissioner to become Dane of the year for 2016,” he said, referring to the title accorded by Danish newspaper Berlingske last month.

Sewell says Apple will tell the court than the EU willfully ignored an opinion by a well-respected Irish tax lawyer in making its decision.

“The Irish put in an expert opinion from an incredibly well-respected Irish tax lawyer. The Commission not only didn’t attack that – didn’t argue with it, as far as we know – they probably didn’t even read it. Because there is no reference (in the EU decision) whatsoever.”

The iPhone maker will also tell the court that the EU’s basis for the case, which the company refers to as the “crazy notion of non-residency,” was chosen on purpose, simply to produce an extremely high amount to base their punishment on. Sewell claims the EU could have based the judgment on transfer pricing – the pricing strategy between a company’s units – or the “arm’s length” principle adopted by companies to sell and buy from affiliates as if they were unrelated firms.

“Both of those other two theories at least could be fleshed out, but they produced much lower numbers,” Sewell said.

The Irish government is also appealing the ruling, saying it must protect its tax dealings, which is says attracts multinational employers to the country.

The company also plans to tell the court the EU improperly ruled that Apple’s Ireland-based business operations, Apple Sales International (ASI) and Apple Operations Europe, existed only on paper and had no right to post billions of euros in untaxed profits.

“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.

Sewell also commented that the company hopes U.S. president-elect Donald Trump will, as promised, enact tax reforms that will help multinational firms like Apple to bring trillions in dollars of overseas profits back to the U.S.