The Obama administration and key lawmakers on Capitol Hill on Tuesday strongly condemned a European Union judgment that U.S. computer giant Apple must pay billions of dollars in back taxes to Ireland because it had received what EU officials deemed “improper” tax breaks over the past decade.
“This is a cheap money grab by the European Commission, targeting U.S. businesses and the U.S. tax base,” New York Sen. Charles E. Schumer, the chamber’s third-ranking Democrat, said in a statement.
Treasury Secretary Jacob Lew had warned EU officials last week of the potential fallout from an adverse ruling on Apple. The department in a statement Tuesday the the Commission’s decision “could threaten foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and EU.”
The Treasury statement called the European ruling “unfair” and “contrary to well-established legal principles.”
Apple Chairman Tim Cook said the EU was improperly interfering in the tax and investment rules of Ireland, where the company has established its tax base. Adding in penalties and interest, Apple is facing a tax bill of $14 billion or more, analysts said.
Although Apple plans to appeal, Mr. Cook said the Commission findings were already threatening investment and job creation in the bloc because of the new uncertainty about the tax and legal environment.
“We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid,” Mr. Cook said.
Sen. Ron Wyden, Oregon Democrat and a member of the Senate Finance Committee, said in a statement the Apple fine “could set a dangerous precedent that undermines our tax treaties and paints a target on American firms in the eyes of foreign governments.”