Tech

Apple takes its $14 billion tax fight with the EU to court

Key Points
  • Representatives from Apple, Ireland and the European Commission argued in hearings at the EU General Court in Luxembourg on Tuesday. 
  • In August 2016, the EU ordered Apple to pay back 13 billion euros ($14.3 billion) in taxes to Ireland, saying the company had received "illegal" tax benefits over the course of two decades.
  • Apple and Ireland are appealing the EU order.
  • The hearings are expected to last through Wednesday, but a decision likely won't be reached for months.
EU Commissioner for Competition Margrethe Vestager.
Emmanuel Dunand | AFP | Getty Images

Apple challenged a $14 billion tax charge from the European Commission in the EU's second-highest court on Tuesday, escalating the landmark tax fight between the iPhone maker and EU regulator.

In August 2016, EU Competition Commissioner Margrethe Vestager ordered Apple to pay back 13 billion euros ($14.3 billion) in taxes to Ireland, saying the company had received "illegal" tax benefits over the course of two decades. Both the Irish government and Apple have appealed the order, with CEO Tim Cook dubbing it "total political crap."

Representatives from Apple, Ireland and the EU appeared in front of the EU General Court in Luxembourg on Tuesday in the latest legal proceeding. Apple's six-person delegation was led by CFO Luca Maestri, according to Reuters. Last year, the EU court denied U.S. officials' request to intervene in the tax challenge.

The hearings in front are expected to last through Wednesday, but a decision likely won't be reached for months. The decision will likely be appealed to the EU's highest court, the Court of Justice.

The European Commission argued Apple's effective corporate tax rate on its European profits in 2014 was just 0.005%, while Ireland disputes the EU's interpretation of Irish tax law. Apple's lawyer Daniel Beard told the court Tuesday the regulator was seeking "headlines by quoting tiny numbers," according to Reuters.

The U.S. has also been critical of the EU order saying Apple should be subject to American tax laws, while President Donald Trump has named Vestager Europe's "tax lady." Vestager, who has made her name taking a tough stance against U.S. tech giants like Apple and Google, was granted another 5-year term earlier this month.

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