EU ruling on Apple unfair: White House

Washington, Aug 31 (IANS) The White House has termed the European Commission’s order for tech giant Apple to pay 13 billion euros in taxes to Ireland as unfair.

According to White House Press Secretary Josh Earnest, the decision is amounted to a “transfer of revenue from US taxpayers to the EU”.

Earnest said the White House was concerned about a “unilateral approach” that threatened to undermine progress that had been made to try to make the international taxation system “fair”, rte.ie reported on Wednesday.

The White House will continue to monitor the case and others being investigated by “the Europeans”, he added.

Apple officials have been in contact with the Obama administration on the issue.

In a setback to Apple just before the much-awaited launch of iPhone 7, the European Commission on Tuesday announced that Ireland must demand 13 billion euros in taxes from the Cupertino, San Francisco-based company.

“We have concluded that Ireland granted undue tax benefits of up to 13 billion euros to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid,” an EU statement read.

Following an in-depth state aid investigation launched in June 2014, the European Commission concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991.

“The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a head office,” the statement said.

The commission’s assessment showed that these “head offices” existed only on paper and could not have generated such profits.

In an earlier white paper, the US Treasury Department warned the EU about taking any action against Apple and other US companies like Amazon and Starbucks.

According to the paper, the EU investigations could “create an unfortunate international tax policy precedent”.

–IANS

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