Apple’s tax fine recently imposed by the European Commission’s anti-trust regulator in favor of Ireland to the tune of $14.5 billion must have gone too far, according to the U.S. Treasury Department.
“As we have said, we believe that 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,” a U.S. Treasury spokesperson said, as quoted by BBC News, in view of the Apple’s E.U.-imposed tax fine.
Such a surprising move by the European Union has been greeted by outrage in the United States, particularly among other government officials.
Understandably, the first to express outrage in response to the Apple’s tax fine, as reported by Patrick Seitz of Investors Business Daily, was CEO Tim Cook, who maintained that Apple has been “a responsible citizen” who complied with Ireland’s tax laws.
Insisting that the European Commission’s move “has serious, wide-reaching implications,” Cook pointed out that it “is effectively proposing to replace Irish tax laws with a view of what the commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters and to the principle of certainty of law in Europe.”
“Using the commission’s theory, every company in Ireland and across Europe,” Cook went on to say, “is suddenly at risk of being subjected to taxes under laws that never existed.”
The report was likewise greeted with anger by U.S. government officials, one of whom, according to BBC News, was Democratic Senator Charles E. Schumer.
“This is a cheap money grab by the European Commission, targeting US businesses and the U.S. tax base,” Sen. Schumer said.
“By forcing their member states to retroactively impose taxes on US companies,” the senator added, “the E.U. is unfairly undermining our ability to compete economically in Europe while grabbing tax revenues that should go toward investment here in the United States. This is yet another example of why we need to reform the international tax system to ensure these revenues come home.”
For his part, White House spokesman Josh Earnest opined that such an unprecedented Apple’s tax fine imposed by E.U. could be unfair to American taxpayers, given the company’s prerogative to claim the cost as a tax deduction in the United States.
“We are concerned about a unilateral approach… that threatens to undermine progress that we have made collaboratively with the Europeans to make the international taxation system fair,” Earnest told reporters, as quoted by BBC News.
Ironically, the Irish government itself has expressed its “profound disagreement” with Apple’s tax fine, insisting that the iPhone, iPad, and MacBook maker has fulfilled its duty in good faith to pay its taxes in full without the benefit of any favorable tax treatments.
According to BBC News, European Parliament Vice President Mairead McGuinness, who is also a leading member of Ireland’s ruling Fine Gael party, took the European Commission’s unprecedented move as a matter of great concern, because taxation should be left for E.U. state-members to decide.
For his part, Irish Finance Minister Michael Noonan said that he disagrees profoundly with the Commission.
“The decision leaves me with no choice but to seek cabinet approval to appeal,” Noonan said, as quoted by Reuters. “This is necessary to defend the integrity of our tax system; to provide tax certainty to business and to challenge the encroachment of E.U. state aid rules into the sovereign member state competence of taxation.”
Should Noonan succeed, which, according to some observers, may take many years, it would clear Apple’s tax fine unprecedentedly imposed by the European Commission, which claims, based on its two-year investigation, that the American company must pay Ireland back in illegal tax benefits plus interest.
Taken from a broader perspective, Seitz noted that E.U.’s case against Apple is part of a wider “crackdown on tax treatment of multinationals by E.U. member nations. The E.U. is still investigating Amazon and McDonald’s. And the E.U. has also had longtime tax battles with Alphabet [Google] and Facebook.”
[Photo by Andrew Burton/Getty Images]