U.S. Treasury Secretary Jack Lew said on Wednesday the European Commission’s order that Apple pay back taxes to Ireland could negatively affect Europe’s economic outlook.
He made this observation at an event to discuss Washington’s position ahead of a meeting of the Group of 20 industrial nations in China next week.
“I have been concerned that it reflected an attempt to reach in to the U.S. tax base to tax income that ought to be taxed in the United States,” Lew said.
The ruling that Apple Inc pay up to $14.5 billion in back taxes, breaches international tax rules and sets a bad precedent for more actions against U.S. companies, Washington has observed.
Apple is not the only company to feel the heat from the EU’s ruling. Amazon.com Inc and McDonald’s Corp are undergoing investigations, while Starbucks Corp has also been stung by an order to remit more Dutch taxes.
Opinion is divided regarding the EU’s decision. The New York Times reports that Apple has long been accused of “being overly creative at avoiding taxes.”
Some politicians argue that the EU is overstepping its authority and putting its own interpretation on international tax law to “unfairly penalize” Apple.
Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency Coalition reportedly said “it’s remarkable to think that the administration has been flying over to Brussels on taxpayers’ dollars to lobby the European Union against collecting taxes owed in Europe when they’re not collecting the taxes owed here.”
In 2013, Carl M. Levin, Democrat of Michigan, who was chairman of the Senate Permanent Subcommittee on Investigations during the investigation of Apple’s use of tax havens had this to say:
“The royalties Apple collects for its overseas sales of products designed and developed in the U.S. should be taxed in the U.S. But Apple has avoided the billions of dollars of taxes it owes the U.S. by transferring its intellectual property to itself in Ireland.”
Apple has said it will appeal the ruling.