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Apple Says $14.4 Billion EU Tax Order Flawed and ‘Defies Reality’

Apple Says $14.4 Billion EU Tax Order Flawed and ‘Defies Reality’

Apple has begun its appeal against an European Union ruling requiring it to pay Ireland $14.4 billion in back taxes. Apple says the EU order was flawed and “defies reality.”

Apple Chief Financial Officer Luca Maestri, and five lawyers representing Apple, are at the European Union General Court, as part of an appeal of the EU’s previous tax ruling. Apple argues that the tax order was based on erroneous assumptions and, “defies reality and common sense.”

Reuters reports Apple lawyer Daniel Beard spoke in court, and said the ruling erroneously presumed the Cupertino firm’s Ireland operation was involved in operations such as the development of Apple device, like the iPhone and iPad.

“The Commission contends that essentially all of Apple’s profits from all of its sales outside the Americas must be attributed to two branches in Ireland,” said Beard. “The branches’ activities did not involve creating, developing or managing those rights.”

“Based on the facts of this case, the primary line defies reality and common sense,” he continued. “The activities of these two branches in Ireland simply could not be responsible for generating almost all of Apple’s profits outside the Americas.”

Beard also accused the European Commission of looking to make “headlines by quoting tiny numbers,” such as the claim by the EC that Apple paid 0.005% tax.

Beard says Apple hasn’t been trying to escape paying taxes, and has been paying them globally. He claimed Apple pays on average 26% tax globally, and is currently paying approximately $22 billion in U.S. taxes on the profits that the Commission claimed should have been taxed in Ireland.