Apple launches legal challenge to $14B EU tax order: 'Defies reality'

Apple is challenging the European Union's decision to bill the U.S. company $14 billion in back taxes, saying the payback "defies reality and common sense." 

Apple is requesting the General Court, the second-highest court of the European Union, overturn the 2016 European Commission case in an appeal, Reuters reported. The company is accused of receiving illegal state aid from Ireland to help it decrease its taxes over two decades.

Apple argues that the decision is flawed because the intellectual property rights were established in the United Staes, not in Ireland, and the Commission is attempting to alter the international tax system, Reuters reported.

"The Commission contends that essentially all of Apple's profits from all of its sales outside the Americas must be attributed to two branches in Ireland," Apple's lawyer Daniel Beard told the court, Reuters reported.

The EU executive countered Apple's argument, saying it did not intend to regulate international tax laws. Instead, it said Ireland should have researched Apple's taxes, Reuters reported.

Ireland is also fighting the 2016 decision because its economy benefited from the deal, according to Reuters.

"The Commission's decision is fundamentally flawed," Reuters reported the country's lawyer Paul Gallagher told the court.

The General Court is expected to issue a decision in the coming months, which will likely spark an appeal from the losing side, Reuters reported. The case could then go to the European Union Court of Justice, which would take years to sort out.