U.S. Warns Apple Tax Probe in Europe Could Set 'Undesirable Precedent'

Just weeks before the European Commission is expected to make a decision in its landmark Apple tax probe, the U.S. Treasury department has criticized the Brussels-based body for "threatening international agreements on tax reform," and warned that a decision against the iPhone maker could "set an undesirable precedent."

Brussels has accused Apple of sheltering tens of billions of dollars in Ireland, partly in exchange for creating jobs in the country, a deal that could be considered illegal state aid. Apple operates multiple subsidiaries in Ireland to pay significantly less tax outside of the U.S., where it earns up to two-thirds of its revenue.

Apple's $64.1 billion in profits generated from 2004 to 2012 could be subject to a higher 12.5% tax rate, compared to the sub-2% it has paid in Ireland, in which case it could owe more than $8 billion in back taxes. Apple insists that it is the largest taxpayer in the world and pays every cent of tax it owes under current laws.

A decision in the tax probe is expected in September or October, according to Ireland's finance minister Michael Noonan. Apple CEO Tim Cook said last month that the company would appeal any unfavorable ruling against the company.

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