American tech firm Apple is expected to be hit with Europe’s largest tax penalty later following claims it received preferential treatment from Ireland.
The company could be forced to pay back billions of euros to Dublin as state tax aid is illegal under European Union rules.
Last week the US Treasury attacked Europe’s tax avoidance crackdown – which also includes firms such as Amazon and Fiat Chrysler.
It said the probe by the European Commission (EC) undermines the international tax system, while the companies under investigation say their arrangements are legal.
If Europe recovers billions in taxes from US firms it could mean less revenues collected by Washington.
Robert Stack, the US Treasury’s deputy assistant secretary for international tax affairs, said: “US taxpayers could wind up eventually footing the bill.”
The US acknowledged the problem of alleged state aid being given by countries such as Ireland, Belgium and Luxembourg in the form of lucrative tax breaks.
But it criticised the EC’s approach in planning to apply new rules to companies retroactively, and also accused it of overstepping its powers.
The EC denied it was targeting US companies and said it was a “standard feature” of European rules that companies would have to pay any benefits from tax breaks found to be illegal.
Ireland has stood by its actions.
Junior finance minister Eoghan Murphy said on Sunday: “We don’t believe we gave any state aid to Apple.”
He reiterated the government’s stance that it would appeal any decision that found against Ireland in the matter.
