The charges specifically relate to fees owed in Ireland where many major U.S. firms are based for taxes purposes. Increasingly the EU has sought to clampdown on multinational corporations avoiding tax by headquartering in countries such as Luxembourg, the Netherlands or Ireland.
The most profitable publically-listed company in the world is expected to send a six-person delegation led by CFO Luca Maestri to a two-day long court session at the EU’s General Court in Luxembourg.
The investigation began some years ago and in 2016 the Commission found that tax rulings in Iralend in 1991 and 2007 had artificially reduced Apple’s tax burden for 20 years, making it a form of illicit state aid.
EU’s Competition Commissioner, who has also just been announced as the new Executive Vice President for Digital, Margrethe Vestager highlighted the 0.005% tax rate Apple’s main Irish unit paid in 2014 as an example of the unusually low payments in the country.
Ireland and Apple are maintaining a united front against this latest crackdown. The company is expected to argue that the majority of its taxes are actually owed to the United States government because most of the value in its products such as engineering, development and design is created across the pond.
Vestager is also investigating deals offered to Starbucks (SBUX) by the Netherlands, to Amazon (AMZN) and Fiat (FCHA) by Luxembourg and a series of British tax incentives schemes.