Apple Inc. officials have complained to the Obama administration about a European Union ruling requiring the technology company to pay $14.5 billion in back taxes to Ireland, and the White House said Tuesday it’s concerned about the “unfairness” of the decision.
Administration officials are working with Apple behind the scenes on the tax liability, but White House press secretary Josh Earnest couldn’t say what steps the U.S. might take with the EU.
“We are concerned about a unilateral approach” by the EU, Mr. Earnest said, adding that it could result in “merely a transfer of revenue from U.S. taxpayers to the EU.”
If Apple does pay back the taxes to Ireland, the company could deduct that mammoth payment from its U.S. tax bill.
“That wouldn’t be fair to U.S. taxpayers,” Mr. Earnest said.
It’s unclear what clout the administration will have on the issue with the EU, where a trade deal with the U.S. also is described by European officials as essentially dead. U.S. Trade Representative Michael Froman is headed for Europe in two weeks for another round of negotiations on trade.
SEE ALSO: U.S. furious over European Union’s Apple tax ‘money grab’
Ireland has given illegal tax benefits worth up to 13 billion euros ($14.5 billion) to Apple Inc. and must now recover the unpaid back taxes from the U.S. technology company, plus interest.
EU Competition Commissioner Margrethe Vestager said Tuesday that Ireland gave illegal tax benefits to Appel and must now recover the unpaid taxes.
“Member states cannot give tax benefits to selected companies_this is illegal under EU state aid rules,” she said.
She said a three-year investigation found Ireland granted such lavish tax breaks to Apple over many years that the multinational’s effective corporate tax rate on its European profits dropped from 1 percent in 2003 to a mere 0.0005 percent in 2014.
House Ways and Means Chairman Kevin Brady, Texas Republican, called the EU’s move “a predatory and naked tax grab.”“And it is another extreme consequence of our broken tax code that continues to hurt American workers,” Mr. Brady said. “This is occurring because our uncompetitive tax code strands American profits overseas instead of allowing businesses to bring those profits home to reinvest in our jobs, research, and growth.”
He said House Republicans will move forward with a tax reform plan “that will allow more companies to operate in our country, hire our workers, and help grow our economy.”
“Instead of standing by and allowing other countries to deliver multibillion-dollar tax bills to American companies, Washington should act now to ensure this doesn’t happen again,” Mr. Brady said.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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