Newspaper article International New York Times

Apple Is Said to Owe Back Taxes in Ireland ; Clawback Could Total Hundreds of Millions and Stir U.S.-Europe Tensions

Newspaper article International New York Times

Apple Is Said to Owe Back Taxes in Ireland ; Clawback Could Total Hundreds of Millions and Stir U.S.-Europe Tensions

Article excerpt

The potential clawback, estimated to be hundreds of millions of dollars, may stoke tensions between American and European officials over tax policies.

The European Union's competition authorities were set to announce a major tax ruling against Apple's tax dealings with the Irish government on Tuesday, a decision that is likely to increase trans- Atlantic tension over how some of the world's largest companies pay taxes on their global operations.

The ruling, which was to come around noon in Brussels, will result in Apple having to pay back taxes to the Irish government, according to three people briefed on the decision who spoke on the condition of anonymity because they were not authorized to speak publicly. The amount is anticipated to be in the hundreds of millions of dollars, one of these people said.

The decision is set to further stoke tensions between American officials and their European counterparts, with Europe claiming the right to oversee tax policies for companies like Apple and Amazon, among others, that have used complicated tax structures in nations like Ireland and Luxembourg to reduce the amount of corporate tax they pay in other countries.

The Obama administration and Congress have strenuously fought to defend Apple, the company that made the iPod music player and iPhone global bywords for American prowess in technology. They have accused the European Commission of leading a campaign against American corporate success and suggested that it would be overstepping its authority by issuing a formal tax order. American officials have said reforms to corporate taxation first need to be agreed to internationally.

"This will be framed by the U.S. as Europe overreaching," said Edward Kleinbard, a professor at the University of Southern California's Gould School of Law and a former chief of staff to the Congressional Joint Committee on Taxation. "That overreaction will make it a lot more difficult to police companies' international tax structures."

Apple, Irish authorities and European competition authorities declined to comment. The tax decision was earlier reported by RTE, the Irish broadcaster.

Margrethe Vestager, Europe's top antitrust official, was expected to say on Tuesday that the Irish government gave Apple preferential treatment on its local tax arrangements. …

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