Apple says $14bn EU tax order 'defies reality and common sense'

Apple says $14bn EU tax order ‘defies reality and common sense’

The European Union’s order to Apple to pay 13 billion euros ($14 billion) in back taxes “defies reality and common sense”, the U.S. firm said as the two sides sparred in a case key to the EU’s crackdown on sweetheart deals to multinationals.

The iPhone maker is appealing to Europe’s second highest court to overturn the European Commission’s 2016 ruling that it pay the record sum to Ireland.

Ireland, whose economy has benefited from investment by multinational companies attracted by low tax rates, is also challenging the Commission’s decision.

Apple also accused the Commission of using its powers to combat state aid “to retrofit changes to national law”, in effect trying to change the international tax system and in the process creating legal uncertainty for businesses.

The EU executive dismissed the arguments, saying it was not seeking to police international tax laws and accused Ireland of not having done its homework when assessing Apple’s taxes.

Apple’s arguments at the General Court, Europe’s second-highest, came after the EU executive in 2016 said the tech giant benefited from illegal state aid due to two Irish tax rulings which artificially reduced its tax burden for over two decades.