EC Apple tax decision slammed by U.S. authorities

Apple CEO Tim Cook

A European Commission (EC) demand that Apple repay €13 billion ($14.4 billion) in back taxes in Ireland attracted the ire of U.S. authorities.

The U.S. treasury branded the order as unfair and said the ruling challenges European Union (EU) member states’ ability to set taxation levels. A White House spokesperson warned that the decision could impact U.S. taxpayers if Apple writes off the repayment against its domestic earnings, BBC News reported.

Democrat senator Charles Schumer also weighed in, telling the BBC that the EC’s decision amounts to money grabbing.

The U.S. authorities were reacting to the EC’s ruling that Apple’s tax arrangements in Ireland breach the EU’s state aid rules.

In a statement, competition commissioner Margrethe Vestager explained that investigations of two tax deals between the company and Ireland revealed that the agreements “have artificially reduced Apple’s tax burden for over two decades”, and that the decision sends a clear message to member states; namely that they “cannot give unfair tax benefits to selected companies” whether they are headquartered in the EU or overseas.

Ireland’s government and Apple denied breaching state aid rules and vowed to appeal the decision, Bloomberg reported. However, opposition politicians in Ireland slammed the government’s reluctance to accept a back payment that would be more than double the amount the country took in corporate taxes during 2015, the news agency noted.

Apple CEO Tim Cook said the EC’s claim that Ireland offered special tax rates to his company “has no basis in fact or in law.” In an open letter, the CEO said Apple “never asked for, nor did we receive, any special deals,” and that the decision is more about “which government collects” Apple’s tax payments, rather than the actual amount it pays.

The U.S. company first invested in Ireland in 1980 and today employs close to 6,000 staff in the country. Cook said the Irish business has since contributed to the creation of “more than 1.5 million jobs across Europe” directly (with Apple) and indirectly in the form of app developers, manufacturers, and other suppliers.

Cook said Apple is “proud of our contributions to local economies across Europe”, and that the company has become the “largest taxpayer in Ireland” during its near 40 year presence in the country.

For more:
- see this BBC News report
- read this Bloomberg article
- view the EC’s statement
- see Tim Cook’s open letter

Related articles:
EE to offer free Apple Music in a UK first
Apple denies Russian iPhone price fixing claims
Apple beats analyst expectations despite drop in fiscal Q3 revenue, profit