EU stands firm as Apple gears up for court battle over $14 billion tax demand

Britain and EU flags

The battle between the tech giant Apple (AAPL) and the European Commission is only just getting started.

In August, competition authorities in Europe accused the U.S. multinational of accepting illegal state aid with its tax arrangements in Ireland – where its European headquarters are located. The U.S. multinational is reportedly launching this week a legal challenge against that decision.

The European Commission ruled that Apple should pay back 13 billion euros ($13.6 billion) – a decision contested by the Irish government itself, who argued that the EU was interfering with its sovereignty. Apple has previously argued that the commission’s decision is “maddening” and “political” and was confident that the bill would be overturned.

However, it doesn’t seem like the European Commission will be softening its position. A spokesperson told CNBC on Monday that “the Commission will defend its decision in court.”

Margrethe Vestager, the EU’s commissioner for competition, argued shortly after presenting the decision in the summer that the ruling was “based on the facts,” which showed that Apple was paying a corporate tax rate of just 0.05 percent in Ireland.

Ireland published is own arguments against the EU’s ruling on Monday and the country’s Finance ministry said that the European Commission has signaled its intention to publish the final decision in the Apple state aid case.

The standoff between the EU and Apple could risk relations between Brussels and one of its member states at a time of multiple crises across the region. The Irish government said it is joining Apple in the appeal, arguing that it had to protect the tax arrangement that has brought several multinationals into the country.

“Apple paid all the taxes that was due for their activities in Ireland,” Michael Noonan, the Irish Finance minister told CNBC in September.

The Irish Finance ministry said in a statement on Monday that “the commission has misunderstood the relevant facts and Irish law”.

“The Commission has manifestly breached its duty to provide a clear and unequivocal statement of reasons in its decision, in relying simultaneously on grossly divergent factual scenarios, in contradicting itself as to the source of the rule that Ireland is said to have breached, and in suggesting that Ireland granted aid in relation to profits taxable in other jurisdictions,” the statement said.

Silvia Amaro

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