APPLE Inc.’s aggressive response to a 13-billion-euros (US$14.5 billion) tax ruling by the European Commission shows the U.S. technology company doesn’t understand the moral obligation on big companies to pay taxes, The Wall Street Journal yesterday quoted the leader of the eurozone’s finance ministers as saying.

    Jeroen Dijsselbloem said Apple had “failed to grasp” the public outcry over tax avoidance by large companies.

    The comments are likely to inflame an increasingly angry trans-Atlantic dispute about the ruling, which has pitched the White House against the European Commission and seen the heavily indebted Irish Government resist a 13-billion-euros tax windfall.

    “The Apple response shows that they don’t grasp what’s going on in society and they do not grasp what’s going on in the public debate,” Dijsselbloem, president of the Eurogroup of finance ministers, said on the sidelines of the Ambrosetti forum of business leaders in Italy. “This is a very strong moral issue and large companies, even if they’re this large, can’t say ‘this is not about us, there’s no problem here.’”

    “American companies or any company that uses all these different tax plans and at the end of the day pays no tax, that’s not fair.”

    The European Commission ruled last week that Ireland breached competition law by allowing Apple to pay a tax rate in the country, where Apple books the bulk of its European profits, that it said reached 0.005 percent in 2014. Apple was told to repay the money to Ireland.

    Apple has hit back hard at the ruling, with chief executive Tim Cook warning in a public letter that it threatens to “upend the international tax system.”

    He also denied the commission’s factual claims. He later told Irish broadcaster RTE that it was reasonable to discuss both the level of tax and which countries it was paid to, but “that conversation should be about future taxes, not retroactive taxes. The European Commission’s overreach in this regard, is unbelievable to us.”

    Both Ireland and Apple plan to appeal the commission’s ruling.

    John Bruton, who was Irish prime minister for part of the period covered by the tax ruling, warned that it endangered the country’s ability to provide a stable tax regime for companies.

    “What’s really threatening is the idea of retrospective tax liabilities on the basis of reinterpretation of tax rulings by people who don’t have a direct competence,” he said.

    The White House has also raised concerns that the European ruling will undermine tax cooperation. But Dijsselbloem said there was no need for a transatlantic “tax war” and called for the strengthening of international standards.

    European Commission President Jean-Claude Juncker used a press conference at the meeting of the Group of 20 large economies in Hangzhou, China, to deny accusations that the ruling was a political decision, or aimed at the United States.

    “It would be totally absurd to choose the area of taxation to attack the United States,” he said. “We are basing our decisions on facts and the legislation that applies here.”

    He pointed out that 35 European companies had also been found in breach of state-aid rules so far this year. (SD-Agencies)