Secretary Lew Criticizes EU Decision to Issue Apple $14.5B Tax Bill

U. S. Treasury Secretary Jacob Lew took the European Union to task Wednesday for its decision to levy a $14.5 billion tax bill on tech firm Apple Inc. on Tuesday, saying the move amounted to a swipe at the U.S. tax base.

"It reflects an attempt to reach into the U.S. tax base to tax income that ought to be taxed in the United States," Mr. Lew said.

The EU's antitrust regulator demanded Ireland recoup what the commission claims are unpaid taxes accumulated over a decade by Apple, escalating growing tensions between Brussels and Washington over the bloc's tax treatment of U.S. companies.

"The pattern of the actions appears to be highly focused on U.S. firms," Mr. Lew said at a Brookings Institution event. "They point to some smaller actions on non-U. S. firms, but the largest actions do appear to be aimed squarely at our tax base."

The secretary said untaxed profits such as those accumulated by Apple are clearly a problem policy makers must tackle. The world's largest economies have agreed to work together to fight the erosion of the tax base through corporate offshoring of profits, and U.S. lawmakers have labored for years, unsuccessfully thus far, to craft a bipartisan tax overhaul.

"What I don't think is right is for these issues to be addressed in a way that undermines the spirit of economic cooperation and inconsistent with well-established principles of tax laws," Mr. Lew said.

European officials said they are following long-standing laws that prohibit illegal state aid to companies and that they are not specifically targeting American companies.

The EU's latest action risks further unsettling international companies facing the broader global effort to curb tax avoidance, adding a new fear that back taxes could be targeted as well.

"It undermines the environment in Europe for international business because it creates uncertainty that will ultimately not be good for the European economy," the secretary said.