Apple Fights $13 Billion Euro Tax Bill

Apple has set up a court battle with European Union competition watchdogs who ordered Ireland to claw back a record 13 billion euro in unpaid taxes from the iPhone maker, according to Bloomberg. The U.S. tech giant said it formally appealed the EU’s August decision to the EU’s General Court in Luxembourg, as the European Commission and Ireland separately published details of their own arguments in the case.

EU slapped Apple with the multi-billion euro bill saying Ireland granted unfair deals that reduced the company’s effective corporate tax rate. The U.S. Treasury said the EU was making itself a "supra-national tax authority" that could threaten global tax reform efforts. The EU "took unilateral action and retroactively changed the rules, disregarding decades of Irish tax law, U.S. tax law, as well as global consensus on tax policy, that everyone has relied on," Apple said in a statement after filing its court appeal.

Ireland has already asked the court to strike down the EU’s decision from August. In a separate filing, the Brussels-based commission published details of its two-year probe, attacking the way Irish authorities taxed profits attributed to two of Apple’s Irish units. The EU also took aim at Irish tax practices, saying they were "too inconsistent" to set firm rules for profit allocation. Ireland said the EU exceeded its powers by ruling on its tax jurisdiction, according to an Irish finance ministry statement.

The Apple investigation, and others probing arrangements for Amazon and McDonald’s in Luxembourg, are the cornerstone of an EU attack on national practices it claims help multinational companies avoid tax. EU Competition Commissioner Margrethe Vestager has repeatedly argued that special tax treatment harms companies that don’t get such advantages.

According to EU filing, regulators shrugged off claims that they weren’t fair to Ireland and Apple during the probe. They argued they always respected their procedural rights and the subject matter of the investigation, profit allocation methods used in tax rulings, never changed. Ireland had "ample opportunity" to express its views and "made use of that opportunity on multiple occasions," the EU said. Though Apple will have to pay its tax bill within weeks, the money will be held in escrow, a final ruling from the EU courts may take several years.