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‘Defies Fact and common sense’,” Apple about $14 billion EU tax Dictate

The European Union’s purchase for Apple to cover 13 billion euros ($14 billion) in back taxes to Ireland”augmented fact and common sense,” that the US firm said on Tuesday, since it established a legal challenge against the 2016 judgment.

The iPhone manufacturer also accused the executive European Commission of using its powers to fight state help”to retrofit adjustments to federal law,” in effect seeking to modify the global taxation system and in the process producing legal uncertainty for companies.

Apple’s arguments in the General Court, Europe’s second-highest, came after the EU executive at 2016 stated the tech giant profited from illegal state aid because of 2 Irish taxation rulings which artificially reduced its tax burden for more than two decades.

The circumstance is vital to European Competition Commissioner Margrethe Vestager’s crackdown on love deals for multinationals, a campaign that has also contributed to actions against Starbucks, Fiat, Engie, Amazon and many others.

“The Commission claims that basically all of Apple’s gains from all its earnings outside the Americas has to be credited to 2 divisions in Ireland,” Apple’s attorney Daniel Beard advised the courtroom.

He said the truth that the iPhone, the iPad, the App Store, other Apple goods and solutions and essential intellectual property rights were developed from the USA, rather than in Ireland, revealed the defects in the Commission’s case.

“The divisions’ actions didn’t involve creating, managing or developing those rights. Depending on the details of the situation, the principal line defies fact and common sense,” Beard said.

“The actions of both of these divisions in Ireland simply couldn’t be accountable for producing nearly all of Apple’s gains beyond the Americas.”

Beard dismissed criticism of this 0.005% tax fee paid by Apple’s primary Irish unit in 2014, that was mentioned by the Commission in its decision, stating the regulator was only seeking”headlines by means of little numbers”.

Paying a typical international tax rate of 26 percent, Apple has stated it’s the greatest taxpayer worldwide and is currently paying approximately 20 billion euros at US taxes to the very same gains the Commission said must happen to be taxed in Ireland.

In its current fiscal quarter, Apple expects earnings of $61-64 billion plus a gross margin of 37.5-38.5 percent.

Ireland, whose market has benefited from investment from multinational firms brought on by reduced tax rates, can be challenging the Commission’s decision.

“Since Ireland has emphasised, it instills legal certainty if country aid measures are utilized to retrofit adjustments to federal law… and legal certainty is an integral principle of EU regulation; just one upon which companies rely,” Beard said.

“Some might want to modify the global tax system; however that’s a tax regulation issue — not state help,” he explained.

Ireland stated it had become the topic of completely unjustified criticism and the Apple tax instance was because of a mismatch between the Irish and U.S. taxation systems.

Attorneys to the Commission will make their case Tuesday.