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The European Commission ruling requiring Ireland to recover EUR13bn (USD14.5bn) in supposedly illegal tax breaks from Apple has been condemned by members of both parties in the United States Congress.
On August 30, the Commission announced its finding that Ireland has granted undue tax benefits to Apple since 1991, and ordered the Irish government to recover unpaid tax from the company for a ten-year period beginning in 2003.
It was a ruling that provoked an angry response from some members of Congress, who have already criticized the Commission for attempting to use EU state aid rules to collect tax retroactively from US firms.
Describing the decision as "awful," House Speaker Paul Ryan (R - Wisconsin) said: "Slamming a company with a giant tax bill – years after the fact – sends exactly the wrong message to job creators on both sides of the Atlantic. It's also in direct violation of many European countries' treaty obligations."
On the other side of the aisle, Senator Ron Wyden (D - Oregon), the senior Democrat on the Senate Finance Committee, called the Commission's ruling "extremely concerning" and agreed that it could undermine internationally accepted legal principles in the area of taxation.
According to Wyden, "the European Commission has effectively stepped outside the terms of existing bilateral tax treaties to hand an American firm a massive, retroactive tax bill."
"This ruling could set a dangerous precedent that undermines our tax treaties," he noted.
Furthermore, Wyden warned that the ruling could disrupt multilateral efforts to change the global corporate tax system under the OECD's BEPS project.
"Right now countries ought to be working in partnership to prevent tax evasion and crack down on the unfair practices that have eroded tax bases in the US and around the world, but [the] ruling could make that kind of partnership more difficult," he said.
For his part, Kevin Brady (R - Texas), Chairman of the House Ways and Means Committee, denounced the move as a "predatory and naked tax grab." However, he also observed that the case highlighted major flaws in the United States corporate tax system.
"This is occurring because our uncompetitive tax code strands American profits overseas instead of allowing businesses to bring those profits home to reinvest in our jobs, research, and growth," Brady contended.
"Instead of standing by and allowing other countries to deliver multibillion-dollar tax bills to American companies, Washington should act now to ensure this doesn't happen again," he said, urging Congress to approve long-awaited reform to the US corporate tax code.
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