EU claim that Ireland gave special tax deal to Apple unproven - State lawyer
Apple and the Government accused the European Commission of misunderstanding the tech giant's Irish business on day two of their appeal against a €13bn tax order, a dispute that is key to the EU's drive to collect more taxes from high-tech multinationals.
The case centres on tax rulings granted by the State to two Apple businesses in Ireland, Apple Sales International and Apple Operations Europe. The rulings reduced Apple's tax burden for more than two decades - to as low as 0.005pc in 2014, according to the Commission, although Apple disputes this.
The Commission in 2016 ordered Apple to pay €13bn in taxes it said were owed to Ireland. Apple and Ireland are appealing the ruling at the General Court in Luxembourg, the second highest EU court.
Central to the dispute is the importance of the Irish businesses.
The lead lawyer for the Government, former attorney general Paul Gallagher SC, said the Commission had failed to prove its case - particularly its claim that the State had provided a special deal to Apple not provided to others - and in the process had tarnished the reputation of Ireland.
"They haven't shown one company which has been treated less favourably than Apple. This is Ireland's reputation which has been so severely criticised," he said in his closing argument.
A lawyer representing Apple, Daniel Beard, told the court the Irish subsidiaries 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," Mr Beard said, referring to Mr Cook's testimony at a US Senate hearing in 2013 which formed a key element of the Commission's case.
Apple did not do a special Irish tax deal in return for creating jobs, Mr Beard argued.
"The Commission went out of its way to tell a fairy story about supposed benefits to employment. It has no evidence. It is wrong," Mr Beard said in his closing argument.
"There was no sense of any special deal. Ireland properly and correctly taxed the Irish branches. There was no derogation from the normal rules.
Commission lawyer Paul-John Loewenthal rejected criticism that the EU executive had not taken up Apple's offer to visit its operations in Cork, saying this was not necessary.
"What would a site visit accomplish?" he asked.
The case is about Apple's Irish tax deal and has nothing to with the mismatch between tax regimes in different countries or US tax-deferral rules, Commission lawyer Richard Lyal said in closing remarks.
Ireland ended the tax rulings when Apple's two Irish units changed their structures in 2015.
The court will rule on the Apple case in coming months. However, the losing party is likely to appeal to the EU Court of Justice, which means a final judgment could take several more years.