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LUXEMBOURG (Reuters) - Apple accused the European Commission of misunderstanding its business on day two of the iPhone maker’s appeal against a $14 billion tax order, in a dispute that is key to the EU’s drive to collect more taxes but which could also run for years.
The case centers on tax rulings granted by Ireland to two Apple businesses in the country, Apple Sales International and Apple Operations Europe, which reduced Apple’s tax burden for more than two decades - to as low as 0.005% in 2014, according to the Commission, although that is disputed by Apple.
The European Commission ordered the U.S. company in 2016 to pay 13 billion euros ($14.4 billion) of taxes it said were owed to Ireland. But Apple and Ireland, whose economy benefits from hosting a number of multinational firms, are appealing against the decision at Europe’s General Court, its second highest.
Central to the dispute is the importance of the Irish businesses, with Apple lawyer Daniel Beard arguing on Wednesday they were not as significant as the Commission has asserted.
“Yes, Apple CEO Tim Cook said there were decisions taken in Ireland, but not strategic decisions,” he said, referring to Cook’s testimony at a U.S. Senate hearing in 2013 which formed a key element of the Commission’s case.
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