EU competition chief denies anti-US bias in investigating tax deals like Apple's
The European Commission is not unfairly targeting American corporations like Apple when it comes to cracking down on tax deals constituting illegal state aid, according to the E.U.'s competition head, Margrethe Vestager.
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Vestager made the statement in a letter sent to U.S. Treasury Secretary Jack Lew on Monday, Bloomberg reported, explaining that she wanted to clear up any misunderstandings between between the two parties.
"If a national tax authority gives certain companies a more advantageous tax treatment than other undertakings in the same country, this can be extremely distortive of fair competition," Vestager wrote.
Earlier in February, Lew made a complaint to Commission President Jean-Claude Juncker about a supposed anti-U.S. bias in investigations. The Commission has already directed scrutiny towards U.S. companies like Amazon, McDonald's, and Starbucks, and countries like Ireland, Luxembourg, and the Netherlands, which have been accused of using sweetheart tax deals to draw in multinational corporations.
Pending an upcoming ruling, Apple could theoretically owe up to $8 billion or more in back taxes due to deals with the Irish government. Both Ireland and Apple have protested -- in January, Apple CFO Luca Maestri claimed that a "fair outcome" of the investigation would find the company owing nothing.
The Commission has in fact targeted European corporations as well, the most notable example being when Belgium was ordered to recover $765 million from 35 multinationals, among them BP and Anheuser-Busch.
Vestager made the statement in a letter sent to U.S. Treasury Secretary Jack Lew on Monday, Bloomberg reported, explaining that she wanted to clear up any misunderstandings between between the two parties.
"If a national tax authority gives certain companies a more advantageous tax treatment than other undertakings in the same country, this can be extremely distortive of fair competition," Vestager wrote.
Earlier in February, Lew made a complaint to Commission President Jean-Claude Juncker about a supposed anti-U.S. bias in investigations. The Commission has already directed scrutiny towards U.S. companies like Amazon, McDonald's, and Starbucks, and countries like Ireland, Luxembourg, and the Netherlands, which have been accused of using sweetheart tax deals to draw in multinational corporations.
Pending an upcoming ruling, Apple could theoretically owe up to $8 billion or more in back taxes due to deals with the Irish government. Both Ireland and Apple have protested -- in January, Apple CFO Luca Maestri claimed that a "fair outcome" of the investigation would find the company owing nothing.
The Commission has in fact targeted European corporations as well, the most notable example being when Belgium was ordered to recover $765 million from 35 multinationals, among them BP and Anheuser-Busch.
Comments
We currently have a 75% or higher tax rate and with the EU stranglehold in place this will increase until we reach a revolution.
The other reason for the EU to exist is as a second - extremely lucerative - career for politicians, they sell their own country short to be able to have a seat in this circus.
So it is better for everyone that the EU breaks up; currently GB is having a referendum on this issue but I suspect it will never come to a GB exit.
This is the crux of the matter, independent of the country of origin of the company in question.
But this little issue isn't anti US bias. Foreign corporations generally, of which the US has big ones, are just a useful target because of the persistent failure of the political class to balance the books. Just one more version of "look over there! a Squirrel!"
I usually like your insights, but this is definitely spam.
Also as I say, no matter your opinion of him, (A) repatriation of billions in overseas earnings would be beneficial and (B) my choice of candidate is no longer in the race. Trump beats Hillary, Obamacare goes away and (hopefully) things get better for American businesses.
The worst Trump could do is not follow through on his campaign pledges, so really he cannot possibly be worse than Obama. Even if he achieved absolutely nothing for his term, that would be an improvement.
Now the "within reason" is the area that is questionable.
An example: Company A based in land X, is owned by company B based in land Y. Company A borrows money from company B in order to run its business. All fine and legal. Problem is that the interest rate company B charges is as much as 10 times higher than the market rate. Company A could easily get a loan from local banks, or hold back more profits so it has operating cash, but chooses to pay 10s of millions extra interest to its parent company.
To me, this appears to be an obvious case of company A not fulfilling its obligation to operate in a way that maximizes profits. Land X could decide to go after company A, and where possible company B, for lost taxes. Naturally, land Y would go after neither because it is already getting its taxes and more.
If land X was a EU land and land Y was America, this would not be a case of a vendetta, just a case of a country protecting its interests.
What is happening with Apple is less "obvious" and, interestingly, revolves heavily around a EC land. Regardless of the outcome of this investigation, it is not a EC vs US vendeta.
Also you seem to have forgotten about Nokia or Erivsson who were in the same arena as Apple in mobile phones who didn't have access to the (alledged) same sweetheart deal. So that's two companies as an example.
Also it is irrelevant that Apple may or may not have direct competitors it is all about whether they had a tax deal unavailable to others and whether the deal goes against EU rules.