Apple tax bill just the tip of a $2.4 trillion iceberg

There's a pot of untaxed, corporate profit gold sitting offshore, and the European Union plans to press for what it considers its fair share.

The official leading that effort, EU's antitrust commissioner, Margrethe Vestager, was in Washington this week to deal with the blow back from her recent decision to slap Apple with a $14.5 billion tax bill.

The visit included a meeting Monday with U.S. Treasury Secretary Jack Lew,who has been bluntly critical of a series of EU investigations into taxes paid by American companies on profits held outside the U.S.

But the visits have apparently left Vestager undaunted.

"The pushback is what we thought it would be," she told CNBC on Wednesday. "These are profits generated in Europe, and also I think (should) be taxed in Europe."

Those profits swelled to some $2.4 trillion — or about 14 percent of U.S. gross domestic product, according to new estimates released Monday.

Both Apple and the Irish government are appealing a ruling last month that the tech giant owes the Irish Treasury $14.5 billion, based on a government tax break that the EU ruling said qualified as "state aid." Such assistance amounts to an illegal subsidy under EU law, the ruling said.

U.S. Treasury officials have blasted the ruling, saying it sets up the EU as "supranational tax authority." The bloc's efforts also threaten to cut into the Treasury's revenue collections because taxes paid to a foreign country can be deducted from a company's U.S. tax bill.

The move has also drawn fire from U.S. corporate groups, including the Business Roundtable, which represents 185 CEOs of large companies with combined revenues of $7 trillion. On Friday, the group sent a letter to the leaders of all 28 EU member countries, urging them to work to overturn the Apple ruling and end the tax probes.

So far, the EU has opened only a handful of formal tax investigations. But Vestager signaled over the weekend that she's not done yet with the Business Roundtable's members.

Responding to a tweet from the head of a London-based investment company, Vestager assured him she is continuing her investigations.

The EU is not just going after American companies. The latest tax probe, announced Monday, is looking into tax deals granted by Luxembourg to a French electric utility company. The European Commission said the Luxembourg tax rulings, first issued in 2008, seem to provide a loophole that lets the company, the GDF Suez Group, now known as Engie, pay no taxes "on a significant proportion" of profits recorded in that country.

But U.S. companies offer a large target for the EU's tax clawback campaign.

The estimated total cash held offshore rose by nearly $200 billion last year, to some $2.4 trillion, according to an analysis from the Economic Policy Institute and an affiliated group, Americans for Tax Fairness.

Roughly half of that cash is held by companies in the information technology and health-care industries, the group said.

And as an increasing number of American companies have stashed more of their profits overseas, the money has become concentrated in just a handful of tax havens.

More than half of those profits are held in Ireland, the Netherlands, Luxembourg, Switzerland, Singapore, Bermuda and Caribbean countries.

American companies have said one major reason for stashing profits offshore is the relatively high 35 percent marginal corporate tax rate.

But thanks to a series of domestic tax breaks and loopholes, few companies pay that much of their profits in taxes.

When measured as a share of the overall U.S. economy, the amount of taxes corporations have paid has been falling for more than half a century while the level of corporate profits has been rising.