Apple Inc (NASDAQ:AAPL) shares were higher on Monday after the world’s largest company by market cap unleashed its legal firepower with a lengthy response to the European Commission’s Irish tax ruling.
Apple is defending why it refuses to pay Ireland $13bn in back-taxes that would amount to a quarter of all its profit in 2015.
Quite apart from the hold it would make in its balance sheet, Apple has criticised the ruling saying that being the “biggest taxpayer in the world” makes it a “convenient target”. Ireland’s Office of the Revenue Commissioners is also defending its tax treatment of Apple, saying the European Commission “misunderstood” the situation.
Apple’s legal response to the EU comes at a time when its shares have been up for four of the last five weeks and are within 1% of their 2016 peak around $118.25 struck in late October.
The battle with the EU is expected to be a drawn-out process, limiting the short-term financial impact. The improved odds of US corporate tax reform and an overseas tax holiday under President-elect Donald Trump reduces the importance of the ruling for Apple.
“If Donald’s promises on tax policy come true, Apple will be paying a lot less tax in the years ahead, even if its appeal to the EU fails. On Apple’s tax roadmap, the EU’s $13bn is merely a possible speedbump in smooth driving ahead,” said Jasper Lawler, Senior Market Analyst at London Capital Group.
Apple shares were last up 0.7% at $116.78 on Monday.