Corporate America’s most powerful chief executives are rallying to Apple’s side in its tax battle with the EU, appealing directly to European heads of government to overturn Brussels’ demand for billions of euros from the tech group.
A group of 185 US company chiefs has urged the EU’s 28 leaders to reverse a European Commission ruling requiring Apple to reimburse Ireland €13bn in underpaid taxes, calling it a “grievous self-inflicted wound”.
The call to intervene - contained in letters sent to leaders by the Business Roundtable on Thursday - marks an escalation in US attacks on the EU, whose decision was slammed as “political crap” by Apple boss Tim Cook.
The corporate chiefs warn the decision threatens to scare away investment by legitimising abrupt reversals of policy. “In the interest of all countries that respect the rule of law, this decision must not be allowed to stand,” says a letter to Angela Merkel, the German chancellor, seen by the Financial Times.
Brussels sparked a transatlantic feud last month by ordering Dublin to claw back at least €13bn from Apple, arguing the favourable tax arrangements Ireland devised constituted illegal state aid between 2003 and 2014. Ireland has said it will appeal against the ruling.
In “exceptional circumstances” EU states can override commission decisions on state aid. But such intervention is unprecedented and highly unlikely in the Apple case because it requires unanimity among all EU countries. Many back the €13bn tax penalty; Michel Sapin, France’s finance minister, called the decision “entirely legitimate”.
Margrethe Vestager, EU competition commissioner, has said Apple should have realised its tax deal was “too good to be true” and dismissed claims she was retrospectively changing Irish law.
If upheld, the ruling would undermine the legal certainty needed to make large-scale investments, the Merkel letter warns. “Absent [a] reversal, other countries outside the EU will interpret the decision as acceptable governmental behaviour and will put all companies with cross-border investments - including EU-headquartered companies - at risk of having their assets expropriated by foreign governments.”
The Roundtable is chaired by Doug Oberhelman, Caterpillar chief, and its vice-chairs are the leaders of Xerox, Honeywell, Lockheed Martin and Dow Chemical. Mr Cook is not a member.
