The Latest: White House worries Apple deal to cost taxpayers

The Latest: White House worries Apple deal to cost taxpayers

1 photo
Save Story

Estimated read time: 6-7 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

BRUSSELS (AP) — The Latest on the European Union's decision that Apple must pay billions in back taxes (all times local):

6:10 p.m.

The White House says the Obama administration is concerned that American taxpayers will ultimately bear the brunt of the European Union's decision requiring Apple to pay billions of dollars in back taxes.

White House spokesman Josh Earnest says Apple could deduct the payment from those back taxes to the amount owed the United States government. Earnest says that's not fair to American taxpayers.

Earnest says it's important for the U.S. and Europe to work collaboratively on the goal of preventing the unfair erosion of the tax base rather than taking a unilateral approach.

When asked about the EU's concerns about an unfair playing field within Europe, Earnest says he won't discuss internal EU business, but that President Barack Obama is committed to ensuring American companies and taxpayers are treated fairly.


5:25 p.m.

Bernie Sanders is applauding the European Union's ruling that Apple must pay 13 billion euros ($14.5 billion) plus interest in back taxes to Ireland.

The Vermont senator and former Democratic presidential candidate tweeted Tuesday that "huge corporations can't be allowed to use loopholes and tax havens to boost their obscene profits even higher."

Sanders focused his insurgent presidential campaign on income inequality and banking reform, arguing that Wall Street financial institutions should pay more taxes and saying the system was "rigged" in favor of the top one percent.

The EU found Tuesday that the U.S. technology company received illegal tax benefits over 11 years. In another tweet, Sanders said: "Apple's earnings in 2015 were the highest reported of any corporation in history, yet apparently that wasn't enough."


3:45 p.m.

The U.S. Treasury Department has expressed disappointment over the ruling by the European Union that Apple will have to pay billions of dollars in back taxes to Ireland because it received illegal tax benefits for 11 years.

The department said in a statement that retroactive tax assessments by the EU Commission "are unfair, contrary to well-established legal principles and call into question the tax rules" of the individual countries in the EU.

The Treasury's statement said the ruling "could threaten to undermine foreign investment, the business climate in Europe and the important spirit of economic partnership between the U.S. and the EU."

Last week, the Treasury had accused the EU of using a different set of criterial to judge cases involving American companies and called the effort "deeply troubling."


2:30 p.m.

Apple CEO Tim Cook says the iPhone maker never asked or received "special deals" on its taxes from Ireland, and that the company will appeal the European Union's decision for it to pay up to 13 billion euros ($14.5 billion) in back taxes.

In a letter on Apple's website, Cook says the company has followed the law since it opened its factory in Cork, Ireland, nearly 36 years ago.

Cook says the EU is trying to replace Irish tax laws with what it thinks the law should have been. Cook says the ruling could lead to job losses in Europe. Apple Inc., based in Cupertino, California, has nearly 6,000 employees in Ireland, Cook says.

In the letter, Cook says Apple expects the EU's ruling to be reversed after its appeal.


2:10 p.m.

Peter Vale, a Dublin-based corporate tax expert for accountancy firm Grant Thornton, calculates that Tuesday's judgment if upheld on appeal will cost Apple 19 billion euros ($21 billion) because the order includes interest for unpaid tax going back more than a decade.

The EU said earlier Tuesday that Apple owed 13 billion euros plus interest, without quantifying what the total might amount to.

Vale says the EU order will require the Irish tax collection agency to issue a demand soon for payment, and any money handed over by Apple would be placed in a hands-off escrow account pending years of litigation before the European Court of Justice in Luxembourg.

Vale says: "While the tax to be collected is hugely significant, this is unlikely to be made available for public expenditure purposes pending the appeal result."


1:45 p.m.

13 billion euros ($14.5 billion) looks like a ton of money for any nation. But for the 4.6 million people of the Republic of Ireland, among the least populous in the 28-nation EU, it's almost unfathomable.

Should Apple eventually pay the Irish that sum, it would represent about 2,825 euros ($3,150) per man, woman and child. In government coffers, that money would easily wipe out Ireland's 2016 deficit and put the country back in the black for the first time in a decade.

Ireland's accelerating economy is already producing rapid growth in tax collections from workers, sales tax and an EU-leading multinational sector of around 1,000 companies with Irish bases. Last year the country spent around 48.5 billion euros — some 13 billion euros of that on health care, the same sum as Tuesday's tax order — and recorded a deficit below 5 billion euros.


1:15 p.m.

Apple has derided the European Union's ruling that it must pay up to 13 billion euros ($14.5 billion) in back taxes to Ireland.

In a response Tuesday, it accused the EU competition authorities of ignoring international and Irish tax law and seeking to scare foreign investment out of Europe.

Like the Irish government, the company vowed to appeal and overturn the order.

Apple said in a statement: "The European Commission has launched an effort to rewrite Apple's history in Europe, ignore Ireland's tax laws and upend the international tax system in the process."

It added: "The commission's case is not about how much Apple pays in taxes, it's about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe."


1:05 p.m.

Ireland's tax collection agency, the Revenue Commissioners, insists that Apple hasn't dodged a penny of lawfully calculated tax in Ireland.

The Revenue Commissioner chairman, Niall Cody, says the overarching problem is "mismatches between different countries' tax rules." Whereas Ireland taxes only a multinational company's profits on sales within Ireland — a country of barely 4.6 million and representing a tiny fraction of those companies' global business — the United States often seeks to recoup tax on a U.S.-headquartered company's profits worldwide.

Cody said Apple's profits "that are not generated by their Irish branches — such as profits from technology, design and marketing that are generated outside Ireland — cannot be charged with Irish tax under Irish tax law."

He says the Revenue Commissioners applied the same Irish tax rules to Apple as to around 1,000 other multinationals, most of them American, with bases in Ireland. He says: "Full tax due was paid in accordance with the law."


12:45 p.m.

Irish Finance Minister Michael Noonan has rejected the European Commission's ruling and says Ireland will appeal the judgment, insisting that Ireland's tax rules were transparent and straightforward.

He has rejected findings that Ireland cut an especially generous tax-avoidance deal to boost Apple's investments in Ireland, where the company employs 5,500 and plans to expand further.

Noonan said Tuesday in a statement issued minutes after the judgment: "I disagree profoundly with the commission's decision. Our tax system is founded on the strict application of the law ... without exception. The decision leaves me with no choice but to seek Cabinet approval to appeal the decision before the European courts."

He accused European regulators of trying to undermine the integrity of Ireland's tax system and subverting rights reserved for sovereign EU states. He said a successful appeal, which could take years, would "provide tax certainty to business."

Ireland's Cabinet will meet Wednesday to confirm plans to appeal the judgment.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Most recent Business stories

Related topics

The Associated Press


    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the Trending 5.
    By subscribing, you acknowledge and agree to's Terms of Use and Privacy Policy.

    KSL Weather Forecast