Brendan Bordelon and Amir Nasr
The European Commission stunned the tech community and U.S. lawmakers with a landmark tax ruling against Apple Inc. The EU ruled that the tech company and Ireland engaged in an illegal tax deal, and ordered Ireland to collect about $14.5 billion in back taxes from Apple.
The ruling outraged Apple Chief Executive Tim Cook, who denied any wrongdoing and called the decision politically motivated and "maddening." He promised to appeal the EU's decision, expressing confidence that it would be overturned. Cook also suggested that Apple could begin repatriating some of its $215 billion in overseas assets back to the United States as early as next year.
After several days of back-and-forth deliberations, the Irish cabinet announced its intent to appeal the ruling. Irish Finance Minister Michael Noonan had immediately recommended an appeal, but it took several days of deliberations for the minority government to convince its parliamentary partners that turning down the tax was in Ireland's best economic interest.
Washington erupted in anger following the European Commission ruling, saying Europe was retroactively targeting an American company. The anger was most acute in Congress, where both Republicans and Democrats accused the EU of an illegitimate "tax grab." White House Press Secretary Josh Earnest criticized the ruling, saying it would allow Apple to deduct the $14.5 billion from its U.S. tax obligations. Treasury Secretary Jack Lew echoed that assertion, adding that the decision is also likely to harm the European economy.
It's unlikely to be the last EU ruling against an American tech company. U.S. tech industry lobbyists are bracing for what one described as an "avalanche" of tax, antitrust and privacy decisions against tech companies like Alphabet Inc.'s Google, Facebook Inc., and Amazon.com Inc.