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By | Shaun Nichols 9th September 2016 19:34

US Congress blew the whistle on tax-dodging Apple, claims Europe

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It was US Senators that tipped off the European Commission to unusual accounting practices at Apple which lead to its €13bn ($14.5bn) back-tax penalty.

That's according to EC Competition Commissioner Margrethe Vestager who told the Copenhagen Business School her team was pointed to potential illegal tax breaks in Ireland by the maker iStuffs.

"The story of the Apple investigation began in the United States. Because the US Senate cares as much as we do about making sure companies pay their fair share of tax," Vestager said.

"And it was their investigation into Apple – and US transparency rules – that tipped us off that the company might have received State aid."

Apple has long been a target for scorn in Washington, DC, for the accounting practices it uses to shift money overseas in order to avoid paying US income tax.

According to Vestager, it was those years of scrutiny from Uncle Sam that provided the EC with the evidence it needed to bust up Apple's Irish tax shelter scheme and calculate that the Cupertino giant owed Europe more than €13bn Euros in back taxes.

As one might expect, Apple has spoken out against the decision, claiming that making it pay the tax bill would undermine European sovereignty and amounted to a targeted campaign by the EC against a single company abiding by the same rules as any other business.

Vestager did not buy the argument, suggesting instead that Apple was trying to use its financial clout to abuse tax laws and avoid EU regulations.

"This isn't about interfering with national tax laws. There's nothing to stop EU governments from deciding to apply a low tax rate to everyone. They just have to make sure that when they apply their tax laws, they don't give certain companies special treatment," the EC competition boss explained.

"That sort of special tax treatment, like any other type of selective unfair advantage, makes it hard for companies that do pay their share to compete on equal terms. And that's what our decision is all about: restoring fair competition." ®

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