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EU regulator signals Apple case just the start of tax probes

BRUSSELS — The European Union’s top competition regulator stood by her decision to demand more than $14 billion in tax repayments from Apple Inc. and tweeted that she may investigate other major US companies, ahead of meetings with officials in Washington.

Margrethe Vestager, the EU’s commissioner for competition, on Monday will meet with US Treasury Secretary Jacob J. Lew; Federal Trade Commission Chairwoman Edith Ramirez; Senator Orrin Hatch of Utah, chairman of the Senate Finance Committee; and other key lawmakers.

Vestager appeared to confirm on Twitter that probes may be launched against companies associated with the Business Roundtable, which on Sept. 16 sent a sharply worded letter to the heads of 28 EU member states. The group says it represents chief executive officers of US companies with $7 trillion in annual revenue. Its members include Jeffrey Immelt of General Electric Co., Jamie Dimon of JPMorgan Chase & Co., and Kenneth Chenault of American Express Co.

Vestager was contacted on Twitter by Davide Serra, chief executive and founder at Algebris Investments, who on Sept. 17 wrote: “Apple: so in the USA there are 185 CEO which think it’s legal to pay 0.05% Taxes in Europe! @ pls check what they pay asap!”

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She replied: “I will. And I keep thinking about all the CEOs who just make sure that their companies do pay their taxes. They exist too.”

Also on Monday, EU officials also appeared to respond to critics that they were unfairly targeting American companies by announcing they were also investigating whether a French company signed a sweetheart tax deal with Luxembourg.

In its letter, Business Roundtable said the EU’s decision to recover $14.5 billion from Apple for alleged illegal state aid “must not be allowed to stand.”

“I urge you to work with your colleagues to overturn this decision and seek an end to the use of state aid investigations that override the ability of your country and other EU member states to determine and interpret their own tax laws,” Business Roundtable president John Engler said in the letter.

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The group’s interest in the matter “is for respect of the rule of law,” Engler said. “Unless set aside, this EC decision sets a precedent that EU member states do not control their tax affairs.”

Last year, EU regulators alleged that McDonald’s Corp. side-stepped corporate taxes in Luxembourg for about five years. The Financial Times reported that the potential tax bill in the country could be $500 million.

McDonald’s hasn’t been told by the EU that it owes $500 million, said Terri Hickey, a company spokeswoman. From 2011 to 2015, McDonald’s companies paid more than $2.5 billion in corporate income taxes in the EU, with an average rate approaching 27 percent, she said.

“We pay the taxes that are owed and have not received any preferential treatment,” Hickey said.

In a separate interview with Germany’s Handelsblatt published Sunday, Vestager defended the decision to pursue the tax-repayment order against Apple.

“It is 100 percent legitimate to tax profit where it is generated,” Vestager told the newspaper. “From our perspective, it is irritating when American companies pay less in taxes than European ones.”

US officials have derided Brussels on the Apple decision. Washington’s claim that the Apple taxes rightly belong to the United States is “difficult to comprehend,” Vestager told Handelsblatt.


Material from other Globe wire services was also used in this story.

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