The U.S. Treasury took the unusual step Wednesday of publishing a detailed critique of the European Commission's investigations into alleged tax avoidance schemes by a group of U.S. firms, including Apple, Starbucks and Amazon.
Apple Inc.'s (NASDAQ:AAPL) thirty-year old tax haven has been busted by the European Commission's antitrust authorities and is expected to declare a huge amount of unpaid tax by companies.
In February US Treasury Secretary Jack Lew wrote to European Commission President Jean-Claude Juncker urging him to reconsider the EU's approach.
The EU has been investigating whether Apple's tax deals with Ireland, which allowed the company to pay very little tax on income earned throughout Europe, amounted to state aid.
The US regulator said that Brussels was using a different set of criteria to judge Apple's case than it has used in past investigations and called the potential action "deeply troubling".
The commission's spokesman said Wednesday that European Union law "applies to all companies operating in Europe - there is no bias against USA companies". Congress investigated Apple's tax arrangements in 2013, which led to CEO Tim Cook testifying before a US Senate subcommittee.
Fine Gael MEP Brian Hayes has claimed there is a "selective bias" in the EU's targeting of certain USA firms in competition and state aid investigations.
The commission also ruled that Fiat owed back taxes in Luxembourg, and Starbucks owed them in the Netherlands, ordering the companies to repay millions of dollars. "Ireland denies that. The structure we have was applicable to everybody - it wasn't something that was done unique to Apple".
It is not the first time the United States has criticised the EU's tax investigations.
The probes concern Amazon's taxes in Luxembourg and Apple's tax-break arrangement in Ireland, which is now withdrawing its so-called double Irish tax perk over a four-year period.
Treasury officials are concerned that if European authorities hit USA companies with major repayments, they'll reduce potential tax collections in the US, the white paper said.
"The money that's in Ireland is money that is subject to USA taxes". To bring it home, the company will have to pay approximately 40% in taxes.
The paper attacked the legal approach the EU is using to determine tax liabilities on American companies, saying it targets "income that (European) Member States have no right to tax under well-established global tax standards".
Ireland's tax laws are a result of the country's tiresome and slow GDP growth which led the country to introduce laws that could increase job opportunities and GDP growth.