U.S. Warns Apple Tax Probe in Europe Could Set 'Undesirable Precedent'

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Just weeks before the European Commission is expected to make a decision in its landmark Apple tax probe, the U.S. Treasury department has criticized the Brussels-based body for "threatening international agreements on tax reform," and warned that a decision against the iPhone maker could "set an undesirable precedent."

Apple Ireland

Apple's offices in Cork, Ireland

According to Financial Times, the U.S. Treasury said the European Commission is becoming a "supranational tax authority," going beyond acceptable enforcement of competition and state aid law. The U.S. has previously called out Brussels for setting unfair and "disturbing" precedents and singling out U.S. companies.

Brussels has accused Apple of sheltering tens of billions of dollars in Ireland, partly in exchange for creating jobs in the country, a deal that could be considered illegal state aid. Apple operates multiple subsidiaries in Ireland to pay significantly less tax outside of the U.S., where it earns up to two-thirds of its revenue.

Apple's $64.1 billion in profits generated from 2004 to 2012 could be subject to a higher 12.5% tax rate, compared to the sub-2% it has paid in Ireland, in which case it could owe more than $8 billion in back taxes. Apple insists that it is the largest taxpayer in the world and pays every cent of tax it owes under current laws.

A decision in the tax probe is expected in September or October, according to Ireland's finance minister Michael Noonan. Apple CEO Tim Cook said last month that the company would appeal any unfavorable ruling against the company.

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Top Rated Comments

mabaker Avatar
58 months ago
God forbid they pay taxes like the rest of us.
Score: 19 Votes (Like | Disagree)
cube Avatar
58 months ago
The EU has rules. Deal with it.
Score: 17 Votes (Like | Disagree)
emm386 Avatar
58 months ago
If you make billions abroad, you get taxed abroad. If you make billions at home, you get taxed at home.

In a reasonable manner - of course!

But a SUB-2% tax rate for one of the biggest, richest and most successful companies on the planet though is neither reasonable nor fair to your employees, who get taxed way beyond that.
Score: 15 Votes (Like | Disagree)
madsci954 Avatar
58 months ago

The EU has rules. Deal with it.

Dear EU,
This is how we deal with it.
Love,
The U.K. #Brexit
Score: 11 Votes (Like | Disagree)
rikscha Avatar
58 months ago

Dear EU,
This is how we deal with it.
Love,
The U.K. #Brexit

Yes by running away doing nothing and taking the own economy down. Great resolution!
Score: 10 Votes (Like | Disagree)
cube Avatar
58 months ago

Can the EU force a European country on deciding how the taxes should be structured? Honest question.

Some sweetheart deals can supposedly go against EU rules. This is how the investigation is going.

The EU has punished more European companies than American ones.
Score: 7 Votes (Like | Disagree)

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