Apple Takes on Vestager in Record €13 Billion Tax Fight

Apple Takes on Vestager in Record €13 Billion Tax Fight

Foto: European Comission

Apple fights the world’s biggest tax case this week, trying to rein in the EU’s antitrust chief ahead of a potential new crackdown on internet giants, according to Bloomberg.

The iPhone maker can tell the EU General Court in Luxembourg that it’s the world’s biggest taxpayer. But that’s not enough for EU Competition Commissioner Margrethe Vestager who said in a 2016 ruling that Apple’s tax deals with Ireland allowed the company to pay far less than other businesses. The court must now weigh whether regulators were right to levy a record 13 billion-euro tax bill.

Apple’s haggling over tax comes after its market valuation hit $1.02 trillion last week on the back of a new aggressive pricing strategy that may stoke demand for some smartphones and watches. The company’s huge revenue, and those of other technology firms, have attracted close scrutiny in Europe, focusing on complicated company structures for transferring profits generated from intellectual property.

A court ruling, likely to take months, could empower or halt Vestager’s tax probes, which are now centering on fiscal deals done by Amazon and Alphabet. She’s also been tasked with coming up with a “fair European tax” by the end of 2020 if global efforts to reform digital taxation don’t make progress.

Vestager showed her determination to fight the tax cases to the end by opening new probes into 39 companies’ tax deals with Belgium on Monday. The move addresses criticism by the same court handling the Apple challenge. A February judgment threw out her 2016 order for them to pay back about 800 million euros.

At the same time she’s pushing for “fair international tax rules so that digitization doesn’t allow companies to avoid paying their fair share of tax,” according to a speech to German ambassadors last month. She urged them to use “our influence to build an international environment that helps us reach our goals” in talks on a new global agreement to tax technology firms.

The first hints of how the Apple case may turn out will come from a pair of rulings scheduled for Sept. 24. The General Court will rule on whether the EU was right to demand unpaid taxes from Starbucks and Fiat Chrysler. Those judgments could set an important precedent on how far the EU can question tax decisions national governments make on how companies should be treated.

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