Apple and the Obama administration have aligned against the European Commission’s tax inquiry into the firm’s Irish affairs.

While there is speculation in business circles that Apple may be preparing to seek a settlement of the case with the Brussels authorities, the company is understood to be strongly resisting any direction to pay back-taxes to Ireland.

With a ruling in the case expected after the general election, Apple chief executive Tim Cook is understood to be advancing the same arguments against the commission as the US treasury.

Robert Stack, a top treasury official, argued forcefully before a Senate committee last month that the investigation could undermine US rights under tax treaties with EU member states.

The Apple case is the largest in a series of inquiries into the affairs in other countries of US groups Amazon, Starbucks and McDonald’s, and Fiat of Italy.

Mr Cook had a surprise “private” meeting on Thursday with European competition commissioner Margrethe Vestager, after which he tweeted that Apple had created more than 1.4 million jobs in Europe.

Settlement

“We are not elaborating on what was discussed,” said Apple spokeswoman Tanya Ridd.

Observers believe there is scope for Apple to settle the case for less than €1 billion, big enough for Brussels to claim a victory but not big enough to damage Apple financially.

Apple has a more than €190 billion in its cash pile.

JPMorgan, its investment banker, has said the firm could be on the hook for $19 billion.

It is understood, however, that Mr Cook remains personally convinced of the firms’s case.

Apple – and indeed the Irish Government – have long argued that it received no selective advantage in Irish tax rulings and has paid all tax lawfully due to the Revenue.

Moreover, Apple has argued that it has set aside money due to the US tax authorities whenever it repatriates profits to US. The tax liability in such cases is deferred until the profit returns to the US operation.

‘Basic fairness’

Apple has also been making the case that any judgment against it by Brussels would amount to a retroactive application of a new tax principle, thereby setting a precedent that might be followed in cases against other US companies.

As US opposition to the inquiry intensifies, ranking Washington officials have been making the same arguments.

Mr Stack, treasury assistant secretary for international affairs, told the Senate finance committee in December that the commission appeared to be disproportionately targeting US companies. Ms Vestager, Denmark’s commissioner, denies any bias.

In testimony to the powerful Senate finance committee, Mr Stack said “the retroactive application of a novel interpretation of EU law calls into question the basic fairness of the proceedings”.

He also said any settlements could give rise to creditable foreign taxes under US law. This could leave American taxpayers to foot a bill when profit was repatriated, unless the US tax was paid on the higher creditable tax.

“We are greatly concerned that the EU Commission is reaching out to tax income that no member state had the right to tax in under internationally accepted standards,” Mr Stack said.