The Government and Apple have jointly criticised as "fundamentally flawed" the European Commission's ruling that the tech giant must pay Ireland €13bn in back-taxes deemed illegal state aid.
Paul Gallagher SC, Ireland's former attorney general, told the five-judge General Court in Luxembourg yesterday that the 2016 order by competition commissioner Margrethe Vestager was "astonishing" and featured "confused and inconsistent lines of reasoning".
"It is a serious overreach for the Commission to override national law. The Commission did not identify a single instance where a taxpayer was treated less favourably than Apple," Mr Gallagher argued.
"The Commission's decision is fundamentally flawed."
Lawyers for Apple, arguing alongside the State, said its Irish units had not developed or managed rights to products designed in the United States.
Apple lawyer Daniel Beard said the Commission order "defies reality and common sense. The activities of these two branches in Ireland could not be responsible for generating almost all of Apple's profits outside the Americas".
Lawyers for the European Commission countered that the subsidiaries - Apple Sales International (ASI) and Apple Operations Europe (AOE) - had no offices outside the State during the decades in question, and therefore Ireland must be liable to collect tax due on profits during that span.
Commission lawyer Richard Lyal called Ireland's assertion of sovereignty on taxation decisions "utterly irrelevant", and described the State's 1991 taxation agreement as drawn in Apple's favour.
Mr Lyal told the court that Revenue officials at the time had "simply accepted an arbitrary method proposed by the Apple Ireland subsidiaries".
"That in itself gives rise to a presumption of a special deal, exceptionally advantageous treatment. It is clear the tax authorities made no assessment in 1991," he argued, describing it as "based on pure discretion. If those decisions were based on pure arbitrary discretion, they must be presumed to constitute aid".
In Dublin, a corporate tax expert, Peter Vale of Grant Thornton, said the Commission's position sought to apply modern views on 1990s rules.
"The essence of the European Commission's case is that the profits generated by Apple's 'stateless' companies had to be taxed somewhere, and that somewhere must be Ireland," Mr Vale said.
"From a distance, it seems that the Commission is attempting to rewrite historic tax rules based on today's laws and mood," he said. "The fact that the profits in question were for the most part not taxed in any jurisdiction was essentially a function of US tax law, which historically allowed a deferral of tax until the profits were repatriated."
The Finance Department mirrored these arguments, saying Apple's primary tax liability resided in the US.
"All important decisions in relation to ASI and AOE were made in the United States and there were no intellectual property-related activities in Ireland. Therefore, the very substantial profits deriving from this intellectual property were not attributable to the Irish branches," it argued.
The State has already collected €14.3bn from Apple, including interest, and placed it in escrow in event their legal challenge ultimately fails.
The losing side in the current case is expected to appeal to the EU Court of Justice.
A final judgment could take several years.