BRUSSELS — Europe’s antitrust enforcer ordered Ireland on Tuesday to claw back up to €13 billion from Apple for granting the American technology giant illegal tax breaks, a move that will ramp up trans-Atlantic tensions over how much global companies should pay in countries where they do business.
The decision by Margrethe Vestager, the European Union commissioner for competition, is the culmination of a two-year investigation into whether Ireland gave preferential treatment to Apple, part of a broader crackdown on corporate tax avoidance. The clawback from Apple, which covers ten years of back taxes, is one of the largest of its kind since the European Commission, the executive arm of the 28-member union, started going after member states that favored selected companies.
The ruling adds to a strained relationship between the United States and the European Union over who has the right to regulate tax payments by some of the world’s largest companies.
The European Commission has aggressively sought to stamp out sweetheart tax deals that countries strike with multinational companies. Along with Apple, the campaign has also ensnared Starbucks in the Netherlands, Amazon in Luxembourg and Anheuser-Busch InBev in Belgium.
But American officials have warned that the commission is overstepping its power given that taxes are typically left to national governments to oversee. They also emphasized that such cases undermine continuing efforts to overhaul global policies and create measures to curtail tax avoidance.
Since early this year, Ms. Vestager; Jacob J. Lew, the United States Treasury secretary; and their teams have met regularly to discuss Europe’s state-aid tax investigations. Mr. Lew visited Brussels in July to put forward the American perspective.
Last week, the Treasury Department released a report criticizing any efforts to claw back taxes from American companies. The document repeatedly claimed that not only did the European Commission not have the right to undertake the tax clawbacks, but that they could harm America’s efforts — and its taxpayers — to collect taxes from American companies with vast international operations.
“That outcome is deeply troubling as it would effectively constitute a transfer of revenue to the E.U. from the U.S. government and its taxpayers,” said Robert B. Stack, a senior Treasury official, in the report.
The European Commission denies these claims, saying that it is relying on a 20-year history of using state aid rules related to corporate tax issues. The Brussels-based agency also says that it has the right to act when certain companies are provided with an unfair advantage — either through tax breaks or other incentives — and that Apple’s operations are based in Ireland, and therefore fall under its jurisdiction.
“Our aim is very simple,” Ms. Vestager said in an interview this year. “Profits should be taxed where profits are made.”
The inquiry into Ireland’s treatment of Apple was spurred in 2013 when a United States Senate committee said that Apple had negotiated a special corporate tax rate of 2 percent or less in recent years in Ireland. The European Commission opened a formal investigation into the matter in June 2014.
Ireland has broadly faced scrutiny for its tax strategies to attract large multinationals.
Its corporate tax rate, at 12.5 percent, is one of the lowest in the developed world. And other incentives and breaks allow companies to cut their bill even further. While it is phasing out some of the more contentious loopholes, Ireland just introduced a new break for revenues on intellectual property, a potentially huge benefit to large technology companies with troves of patents.
Ireland has defended its approach to taxes, saying it did not give preferential treatment to Apple or other companies. The country’s Finance Ministry, in a statement, said that the commmission’s decision would undermine continuing global tax overhaul and create uncertainty for business in Europe.
The finance minister, Michael Noonan, said he would move to appeal the decision, adding it was “necessary to defend the integrity of our tax system.”
“It is important that we send a strong message that Ireland remains an attractive and stable location of choice for substantive investment,” he said.
Ireland can sue at the Court of Justice of the European Union, an appeal that Apple could support by bringing a separate case seeking to overturn the decision. The appeals process could take years.
But Ms. Vestager indicated in a statement that the evidence her investigators had accumulated was strong enough to withstand a legal challenge.