Apple’s battle with the European Union’s competition watchdog has been backed by the US government, which on Wednesday waded into the complaint over the iPhone maker’s tax arrangements.
The US treasury warned in a white paper that Brussels’ ongoing investigation into Apple’s tax deal with Ireland could “create an unfortunate international tax policy precedent.” On Thursday, the European Commission responded that there was “no bias” against US companies.
The commission is considering whether the company used so-called “transfer pricing arrangements” to move profits around in order to avoid tax. Ireland is implicated in letting Apple pay a tiny amount of tax. Technically, this means that it may have benefited from illegal state aid.
“Tax rulings may involve state aid within the meaning of EU rules if they are used to provide selective advantages to a specific company or group of companies,” the commission states.
But the US treasury warned that Vestager’s office was in danger of overstepping its bounds “beyond enforcement of competition and state aid law under the TFEU [Treaty on the Functioning of the EU] into that of a supra-national tax authority.”
It said it was considering “potential responses should the commission continue its present course,” adding: “a strongly preferred and mutually beneficial outcome would be a return to the system and practice of international tax cooperation that has long fostered cross-border investment between the United States and EU member states.”
Vestager has already ordered the payment of more than €20 million in back taxes from Starbucks …