By Jason Lange

WASHINGTON (Reuters) – The Obama administration on Thursday took action to limit the use of foreign tax credits by American multinational companies to reduce their U.S. tax bills, a move that followed an EU order that Apple Inc pay back taxes to Ireland.

The Treasury issued legal guidance reducing the scope companies have to apply foreign tax credits against their U.S. tax obligations. It was not immediately clear how this could affect Apple, which European regulators ordered last month to pay Ireland 13 billion euros ($14.6 billion).

“We are closing another tax loophole that contributes to the erosion of our tax base,” said Treasury Assistant Secretary for Tax Policy Mark Mazur in a statement.

Analysts have speculated whether Apple would be able to cut its U.S. tax bill by claiming foreign tax credits for the extra taxes it has been told to pay in Europe.

The Treasury’s tax notice applies to all companies required by a foreign government to pay additional taxes, a Treasury spokesperson said.

(Reporting by Jason Lange; Editing by Kevin Drawbaugh, Chizu Nomiyama and Meredith Mazzilli)