Economics
Apple’s $14.5 Billion EU Bill May Press U.S. on Tax Overhaul
- Amazon and McDonald’s also subject of European investigations
- Companies may be able to cut U.S. taxes via offshore payments
Apple Appealing EU Tax Ruling of $14.5B
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The European Union’s finding that Apple Inc. owes Ireland more than $14 billion in back taxes reveals the high cost the U.S. Treasury may pay by failing to keep pace in a global effort to stem corporate tax avoidance -- and Apple might represent only the first major U.S. loss.
The EU commissioner for competition said Tuesday that Apple’s tax arrangement with Ireland constitutes anti-competitive “state aid” to the company. If Apple ultimately has to pay billions in taxes to Ireland, the iPhone maker may be able to reduce its U.S. taxes by using foreign-tax credits available under U.S. law. Apple executives and Irish officials have said they plan to challenge the EU’s order.