EU ruling on Apple stirs calls for U.S. tax reform

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ARCHIVE - A collection of 500 euro notes are hung out to dry 18.08.2009 in Sieversdorf, Germany. The ECB is expected to ditch the notes shortly because of fears they are most being used by criminal gangs. Photo: Patrick Pleul/dpa

By David Morgan and Jason Lange | WASHINGTON

A European Commission order requiring Apple Inc (AAPL.O) to pay Ireland $13 billion euros ($14.5 billion) in unpaid taxes on Tuesday drew swift rebukes from the Obama administration and lawmakers in Congress, while reigniting calls for U.S. tax reform.

The White House and the Treasury Department, which enforces federal tax policy, warned that U.S.-EU economic relations could be affected by the European Commission’s ruling that Apple had received illegal state aid under its agreement with Ireland.

Business groups protested. The Business Roundtable, which represents U.S. chief executives, called the decision “an act of aggression” against a law-abiding U.S. company and a sovereign government.

Members of both parties in Congress pointed to the stunning decision as evidence that the U.S. tax code should be rewritten to give American companies an incentive to bring home some $2.1 trillion in U.S. corporate profits held abroad. But there was no sign that lawmakers were any closer to bridging the substantial divides that have prevented agreement up to now.

“Above all, this is yet another reason why we need to fix our tax code,” House Speaker Paul Ryan, the highest-ranking elected Republican, said in a statement. “Today’s decision should be a spur to action.”

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