Apple Receives $14B Tax Order From EU

Recently, Apple received an order from the European Union to pay 13 billion euros ($14 billion) in back taxes. And then, the tech giant launched a legal challenge against the 2016 ruling.

Moreover, the U.S. company cited that the executing European Commission is using its authority to fight state aid to retrofit changes to national law. In effect, trying to alter the international tax system, and it is starting to create legal uncertainty for businesses.

The six-strong delegation to the court, led by Chief Financial Officer Luca Maestri, will have five judges. And they will hear the arguments of both sides, as well as Ireland, Poland, Luxembourg, and the EFTA Surveillance Authority, over two days.

Daniel Beard, a lawyer of Apple, stated that the Commission wanted the iPhone maker firm to attribute all of its profits from all its sales outside America. And put it in the two branches in Ireland. “The activities of these two branches in Ireland simply could not be responsible for generating almost all of Apple’s profits outside the Americas,” he said.

Apple Vs. EU

Furthermore, the Commission cited in its decision about the 0.005% tax rate paid by the main Irish unit of Apple in 2014. However, Beard quickly dismissed the criticism by saying the regulator was just probing for headlines by quoting tiny numbers.

As of now, the tech giant pays a global tax rate of 26%. And it is the largest taxpayer around the world. Its payment hits 20 billion euros in U.S. taxes on the same profits that the Commission said should have been taxed in Ireland.

Aside from that, Apple expects revenue to hit $61 to 64 billion in its current financial quarter. And for its gross margin, it is anticipating for 37.55 to 38.5%

On the other hand, Ireland is also challenging the Commission’s decision.