Apple Inc. (NASDAQ:AAPL) and the European Commission are at loggerheads. The tech giant claims that the European Union’s competition watchdog was not fair in its investigations of a high-profile $13.7 billion tax case. According to a report by the Financial Times, there was a breach in “right to good administration.”
The iPhone maker is disputing the commission’s findings that it was using its European headquarters in Ireland to evade payment of taxes. EU alleges that Ireland granted Apple a whopping €13 billion worth of illegal state aid. Having nullified this, the agency says that the company owes Ireland €13 billion in unpaid taxes.
Baseless Allegations Apple says
The most valuable company in the world has vowed to challenge EC’s decision, which it refers to as baseless. It argues that it has become the agency’s target because of its continued success.
Apple’s pleas categorically state that the commission failed to carry out a thorough and unbiased investigation. Speaking to Danish newspaper Berlingske, Apple’s general counsel Bruce Sewell clarified, “Apple is not an outlier in any sense that matters to the law. Apple is a convenient target because it generates lots of headlines.” Why the EC would conduct an unbiased investigation when the taxes that Apple was supposedly meant to pay finance the EC itself, is an open question.
The case sets a stage for one of the biggest competition cases
Clearly, the tag of war between the two is gaining momentum by the day. According to German Green MEP Sven Giegold, a member of the parliament’s tax avoidance committee says that there is no provision of a right to receiving tax subsidies. Hence Apple is not above the law.
In response, Apple argues that taxing of its profits should only be in the US where its intellectual property is created. With all these back and forth responses, the legal battle will now be moving to the EU Court of Justice, also an interested party because it is financed by EU taxes. Apparently, the Irish government has already spent €1.8 million in trying to appeal the verdict by the EU.
From the look of things, the battle will not take less than six years to reach a conclusion. Meanwhile, Apple’s stock closed at $136.70 witnessing an increase of $0.98 or 0.72%.
