The European Commission argued Ireland "blindingly accepted" Apple Inc.'s proposals on its taxable profits on day two of hearings for the firm's appeal against a tax ruling.
The Commission in 2016 decided the tech company's Irish units had received selective tax treatment that amounted to €13 billion.
Ireland followed the European Union's order last year by collecting the full amount of payments back from Apple, along with €1.3 billion in interest, which is sitting in an escrow holding account pending the appeal outcome.
The parties made their cases to the General Court in Luxembourg on Sept. 18 on the second of two days of hearings, with the EC's lawyer arguing that Apple's business in Ireland existed only on paper. One judge responded the business "looks like a phantom company in your perspective," according to Bloomberg.
The Commission also asserted that Ireland's lack of scrutiny of Apple's tax proposals amounted to giving the firm an illegal advantage.
Apple's argument infers that its Irish units are not as significant as the Commission claims. The company's lawyer Daniel Beard said Sept. 17 that it makes its strategic decisions relating to research and development and intellectual property outside of Ireland, and mainly in the U.S., and therefore its profits are taxable there.
Beard described Apple as the world's biggest taxpayer. He argued that by overruling Ireland's tax decisions the EC was retroactively changing the law, a move that could alienate potential investors in the country.
Ireland — which is also appealing the decision — said that it was only obliged to look at Apple's Irish branches under state laws.
A ruling is not expected for months, however, and it is widely believed that the losing party will appeal the decision at the EU Court of Justice.
