U.S. reportedly seeks to intervene in Apple’s tax fight with the EU

Tax
The EC has ordered Apple to pay as much as $14.5 billion in taxes and interest.

The United States government is reportedly looking to intervene on Apple’s behalf in the company’s tax battle with the European Union (EU).

In August, the European Commission (EC) ordered Apple to pay as much as $14.5 billion in taxes and interest after ruling that a deal with the Irish government illegally granted undue tax benefits to the iPhone vendor. The figure is reportedly 40 times bigger than any previous demand under EU rules prohibiting countries from helping companies gain advantages over their competitors. The decision by the EC follows an investigation launched in June 2014.

The U.S. treasury at the time branded the order as unfair and said the ruling challenges European Union member states’ ability to set taxation levels.

The fight escalated in December when the EU’s executive arm claimed in a 130-page document (PDF) made public this morning that Irish tax authorities have been “inconsistent” in their treatment of Apple and other companies, as The Wall Street Journal and other outlets reported. Apple generated $130 billion in profits over more than a decade that should have been taxed at Ireland’s 12.5% corporate rate, according to the EC, but the money was largely untaxed.

Apple has appealed the case to Europe’s second-highest court, and Reuters reported Tuesday that the U.S. filed an application with that court to intervene in the case. The Reuters report cited a single, unnamed source.

The court is expected to hear the case late next year, Reuters said. The Trump administration has yet to publicly weigh in on the matter.

Interestingly, Ireland is teaming with Apple to appeal the ruling. Ireland released a statement last year claiming the EC had “misunderstood the relevant facts and Irish law,” saying the commission “failed to follow required procedures” and exceeded its purview by interfering “with national tax sovereignty.”

The battle could strain growing tensions between the EU and the U.S. over the commission’s tax investigations into American companies, as The Wall Street Journal has reported. A representative from the U.S. Treasury Department recently expressed disappointment in the ruling and said “retroactive tax assessments by the Commission are unfair, contrary to well-established legal principles, and call into question the tax rules of individual Member States,” according to the newspaper.