US in last-ditch effort to quash Brussels tax demand on Apple
In a sharp escalation of the transatlantic feud, the US Treasury department issued a rare warning on Wednesday that Brussels was becoming a “supranational tax authority” that threatened international agreements on tax reform.
The criticism comes as the European Commission is finalising a probe into an alleged sweetheart tax deal that Ireland granted to Apple, the biggest single case in a crackdown on corporate tax avoidance across the EU. After prolonged delays, a definitive ruling is expected next month.
The Obama administration is stepping up its assault on the probe having failed to deter Brussels earlier this year by arguing publicly that it was setting unfair and “disturbing” precedents and singling out US companies.
The Apple probe, which began in mid-2013, centres on “transfer pricing”, a practice by which companies move profits to low-tax jurisdictions through internal transactions. The commission has accused the Irish authorities of “reverse engineering” tax opinions to help Apple minimise its tax bill. The company has faced criticism in the US Senate for paying a 2 per cent corporate tax rate in Ireland, far lower than the headline 12.5 per cent rate.
