Apple and EU Clash in Public Over Tax Bill

Apple and EU Clash in Public Over Tax Bill
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Apple and European Union competition watchdogs clashed on a public stage for the first time since regulators ordered Ireland to claw back a record-breaking 13 billion euros in back taxes from the iPhone maker, according to Bloomberg.

The EU’s August decision is “seriously flawed“ and implies Apple products such as its best-selling smartphones are designed in the Irish city of Cork, rather than the U.S., a lawyer for the California-based tech giant argued during a state-aid conference in Copenhagen . An EU official hit back, saying the company was creating a “very nice tax story.“

“There are great products in Ireland, but it’s not the iPhone,“ said Andreas von Bonin, an attorney for Apple at Freshfields Bruckhaus Deringer. “The iPhone is a U.S. product and not an Irish product.“ The EU’s conclusion is not in line with “reality.“

In an order that reverberated across the Atlantic, the EU slapped Apple with the multi-billion euro bill, saying Ireland granted unfair deals that reduced the company’s effective corporate tax rate to as little as 0.005 percent in 2014. The U.S. Treasury said the EU was making itself a "supra-national tax authority" that could threaten global tax reform efforts.

The EU decision focused on how Apple allocated almost all its European sales profits to what the regulator said was a head office not subject to tax.