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What you need to know about who’s next.
It has been more than 200 years since the U.S. waged war with a European power over taxes. But now a more modern transatlantic struggle is brewing over much the same issue—this time with enormous sums in play. In August, European Union officials ordered Apple AAPL 0.01% to pay a whopping $14.6 billion in back taxes to Ireland, where it stations key parts of its business. Stunned at the giant fine, the U.S. Treasury told EU officials the ruling would have a “chilling effect” on trade and alleged that Brussels wanted to inflict pain on the largest U.S. company by market cap.
But this battle extends far beyond Apple. At stake is what happens to about $2 trillion that U.S. companies are estimated to have stashed abroad, out of reach of the U.S.’s 35% corporate tax. With governments vowing to crack down on tax havens, the scramble to decide where such levies might go has begun, and several EU countries, including France, Italy, and Germany, believe Apple owes them, too, a slice of those revenues.