Apple tax: US treasury says £11bn EU penalty could hurt foreign investment

The criticism came as Apple was reeling from the European Commission decision to make tech giant pay tax and interest to the Irish government

Andrew Buncombe
New York
Tuesday 30 August 2016 13:22
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The appeal comes amid a debate over the amount of taxes paid by corporations
The appeal comes amid a debate over the amount of taxes paid by corporations

The US has been quick to criticise a decision by the European Commission that Apple should pay back taxes in Ireland - saying the move will “undermine foreign investment”.

“The Commission’s actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the US and the EU,” a Treasury spokesperson said on Tuesday.

The US has emerged as a staunch defender of Apple, and has made clear its unhappiness about the reach of the decision. Last week, US Treasury secretary Jack Lew accused the EU of trying to become a “supra national tax authority”.

He claimed US companies were being treated unfairly and that the EU was potentially undermining efforts to reform international tax rules so companies pay their share. He also expressed concern that Apple would offset this bill against its US bill, potentially resulting in a huge transfer from US taxpayers to Irish taxpayers.

Earlier this year, in an open letter to the president of the European Commission, Jean-Claude Juncker, Mr Lew warned that he had “serious concerns about fundamental fairness” of the EU’s tax policy.

US Treasury secretary Jack Lew accused the EU of trying to become a 'supra national tax authority'

He added that the uncertainty created by the investigations “could damage the business climate in Europe and deter foreign direct investment”.

US officials have long argued that Brussels is attempting to force EU member states to levy taxes on earnings it has no right to pursue.

American companies face tax charges of 40 per cent if they attempt to repatriate the money to the US. That disincentive has led to US groups building up large overseas cash piles in low tax destinations, the FT said.

Ireland offers US companies the prospect of minimal regulation and significantly lower corporate tax rates. This is a major reason why top-ranking US tech companies, including including Apple, Google, Amazon, Facebook, Yahoo, Microsoft, Twitter and eBay, have corporate facilities in Ireland, where they employ thousands.

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