US Launches Attack on Brussels’ Tax Investigations into Apple
The US has launched an attack on Brussels’ tax investigations into Apple and other companies over alleged EU targeting of US multinationals. According to The Telegraph, the US Treasury has accused the European Commission of trying to become a “supranational tax authority”, just ahead of Brussels announcement of the results of its lengthy investigation into Apple’s Irish tax affairs.
The US Treasury claims that the EU’s attempts to reclaim tax from US companies is creating an “unfortunate international tax policy precedent”, by threatening to undermine global attempts to reform tax rule. The report also says that while there have only been three transfer pricing investigations involving US companies, further cases “may lead to a growing chilling effect on US-EU cross-border investment”.
The White House is concerned that if the EU were to hit multinationals with hefty tax demands it would affect American taxpayers by allowing the companies to offset them against US taxes when they repatriate offshore earnings.
“The companies’ US tax liability would be reduced dollar for dollar by these recoveries,” a report commissioned by US Treasury Secretary Jack Lew said on Wednesday. “That outcome is deeply troubling, as it would effectively constitute a transfer of revenue to the EU from the US government and its taxpayers.”
The attack is the latest sign of growing tensions over European treatment of US companies, which has seen it accuse the likes of Google and Microsoft of abusing their dominance. The commission however has maintained its stance that European law applies to all companies operating in Europe and that there is no bias against US companies