Tech giant Apple will challenge a recent ruling by the European Commission that ordered the company to provide a 13 billion euros (roughly $14.4 billion) payment in Irish back taxes over a controversial tax avoidance situation by global firms regarding a landmark case in the European Union (EU).
The EU is looking for strict measures to avoid tax avoidance at all costs, but the 13 billion euros payment hasn’t been very well-received by the worldwide famous iPhone maker, which is planning to start its actions on Tuesday.
A Two-Day Hearing
Apple is reportedly going to send a legal team of six men to Luxembourg’s General Court, the second one in importance in the European Union, which is where the court hearing will take place. The gathering will last two days, and Apple’s staff will be lead by Luca Maestri, currently functioning as the firm’s Chief Financial Officer.
Three years ago, on August 2016, the European Commission stated that tax rulings by Ireland in 1991 and 2007 observed that the country was illegally aiding Apple’s tax policy for more than two decades by artificially reducing the amount that the international company had to pay.
Several prominent voices inside the European Commission, most notably the Commissioner Margrethe Vestager, signaled towards a 0.005 percent tax rate paid by the firm’s primary Irish team five years ago, in 2014, as a perfect example of the minuscule contributions that Apple was making when it comes to taxes.
However, Apple has already prepared its defense. The company will point out to the fact that there was no damage done because it fully complied to both Irish and United States’ regulations. The company offered similar sentiments in a blog after the EU tax decision was made.
The outcome of the legal battle could have consequences in the stock market. The shares of the company could be affected, as reputation comes into the equation. The effects can be substantial, as betting on Apple is not the same as if one would invest in penny stocks.
The Defense Has Been Set
Apple will state in the hearing that the vast majority of its tax obligation is towards American authorities, since most of the value of their items, in all of the phases involved in their development, is created in the United States.
It is worth pointing out that Ireland wants to challenge the EU decision, as well, because authorities think that the Commission is deliberately interfering with the sovereignty of EU members, with a focus on tax developments.
Global firms are enticed by the tax policy in Ireland, a country in which somewhere close to 10 percent of the workforce provide their services to these companies.