Trump administration backs Apple’s appeal of EU tax case

The Trump administration is backing Apple in its $14.8 billion tax fight with the European Union.

Apple is challenging an EU order for the company to pay that amount in back taxes to Ireland.

The administration filed an application with an EU court to support Apple’s appeal, according to a source familiar with the matter.

{mosads}”I can confirm the United States filed an application with the European Union General Court to intervene in the case involving the retroactive application of state aid rules to Apple,” the source told The Hill on Wednesday.

According to Reuters, which first reported the move, the EU General Court is expected to hear Apple’s appeal in 2018.

The Department of Justice declined to comment.

The EU ruled in August 2016 that Ireland had given Apple illegal tax benefits and ordered the tech giant to pay back 13 billion euros.

Officials alleged that under its tax arrangement in Ireland, Apple managed to avoid paying taxes on almost all of its European sales.

“The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years,” Margrethe Vestager, the EU’s competition commissioner, said at the time.

“In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.”

According to the EU, only 50 million euros of the 15.95 billion of profit generated by Apple’s sales was taxable under the arrangement with Ireland.

An Apple spokesperson did not immediately respond to a request for comment. But the company has lashed out at the EU over the fine, calling regulators’ case “legal mumbo jumbo.”

“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,” Apple said in a statement when the fine was announced last year.

“Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”

Former President Barack Obama criticized the decision at the time and called for international leaders to better coordinate global tax policies.

“It’s in the interest of all countries, whether they’re developed countries or developing countries, to put a stop to this,” he told reporters at a G20 summit last year.

President Trump, though, hasn’t given the issue much public attention since taking office.

Apple isn’t the only big American tech company to clash with European regulators.

Last month, Vestager also hit Google with a record $2.7 billion antitrust fine for promoting its own comparison-shopping service over others in search results.

Google is facing two other European antitrust investigations.

Reuters reported on Wednesday that Google could also face a new record fine from the EU over an investigation into whether its Android operating system unfairly shut out competitors.

The European crackdown on American tech companies has prompted some to accuse the EU of protectionism by unfairly targeting overseas businesses.

Vestager has denied those claims.

The Apple case could also provide an opening for the Trump administration to improve its often rocky relationship with Silicon Valley by going to bat for American firms under scrutiny in Europe.

It is unclear whether officials plan to similarly intervene in any other tech companies’ appeals before the EU.

This story was updated at 4:23 p.m.