European authorities’ decision to slap Apple with a huge bill for back taxes was not a decision “against the United States”, European Commission chief Jean-Claude Juncker said yesterday as world leaders gathered in China for a major economic summit.
The €13bn demand for payment from the American electronics giant has raised hackles in the US, with the White House decrying what it described as a “unilateral” approach to rewriting global taxation norms.
Speaking to reporters before the Group of 20 leadership summit in Hangzhou, Juncker said the decision was not aimed at the US.
“It would be absurd to choose this territory of state taxation to attack the US,” he said, adding that most of the commission’s punitive measures were against European companies.
“We are applying the rules,” he said. “We are basing our decisions on facts and on the legislation.”
Brussels said Apple, the world’s most valuable company, avoided virtually all tax on its business in the bloc by illegal arrangements with EU member Ireland, which gave the company an unfair advantage over competitors.
Apple and the Irish government have said they will appeal against the European Commission ruling, with the iPhone maker warning it could cost European jobs.
Ireland has attracted multinationals over many years by offering favourable tax deals to generate much-needed jobs and investment.
But after a three-year investigation, Brussels said the arrangement with Apple broke EU laws on state aid. The findings come amid growing tensions between Washington and Brussels over a series of EU anti-trust investigations targeting other giant US companies such as Google, Amazon, McDonald’s, Starbucks and Fiat Chrysler.
Tax avoidance has moved sharply up the political agenda since EU governments adopted tough austerity policies to balance public finances, fuelling public resentment that the rich paid relatively little tax.
Speaking before the summit, White House Press Secretary Josh Earnest said President Barack Obama would seek to address tax avoidance with world leaders in Hangzhou.
“We need to find a way to make the global system of taxation more fair — more fair to countries around the world, particularly countries like the United States,” he said.
But, he added, “we need to make sure that there aren’t entities or countries acting unilaterally in ways that exacerbate inequities in the global tax structure”.