The United States is becoming increasingly sniffy about the way the EU is conducting tax investigations into the US multinational companies, such as Apple, Amazon and Starbucks.
Despite the swinging tax requirements it metes out to its citizens living abroad, the US Treasury on Wednesday threatened to retaliate if the EU continues tax avoidance probes into American companies.
A US Treasury white paper accused the EU of a disproportionate targeting of US companies and said the EU was like a “supranational tax authority”.
EU commissioner Margrethe Vestager is currently in charge of a probe into the tax affairs of Apple. Should she rule against Apple’s arrangements, it could be told to pay as much as $19 billion in unpaid tax to the Irish government.
One MEP struck back, saying the US was “acting like a tax haven”
“The US is behaving like a tax haven by operating a deferral system which allows US companies to stash profits offshore,” said Molly Scott Cato, Green party spokesperson on tax. “The commission is seeking to prevent exactly this sort of free-riding and to ensure that tax is paid where economic value is added.”
“The US Treasury prefers defending the interest of its multinationals rather than promoting international cooperation to fight corporate tax avoidance,” she added.
The EU Commission said that all companies generating profits in an EU country should pay taxes according to national laws. Moreover, EU rules provide that national tax benefits must be available for all companies, without beneficial rates for particular firms.
The Commission has already ruled that the special tax deals of Starbucks with the Netherlands and Fiat with Luxembourg amount to illegal state aid. Earlier this year, the Commission took a preliminary view that Amazon’s arrangements with Luxembourg may amount to the same; a final decision is pending.
The Treasury’s white paper said the US is considering “potential responses should the Commission continue its present course”. One option open to consider is the revision of existing tax treaties, which could have a “chilling effect” on US investment in Europe, it claimed.
Comments
When you think of the massive financial cost of the FATCA rules forced on the whole world's banking institutions by the USA ....... yet they whinge when their own precious international corporates cook the books & other countries tax authorities rightly wave a big stick at them.
The words hypocrite & arrogant come to mind. I hate them with a passion - but cross them at your peril. That was always the problem with the playground bully.
However, I roared with laughter at the Green Party MEP saying the US was “acting like a tax haven". Has she not heard of Luxembourg, the tax haven created and supported by her own dear Claude Juncker?
Hypocrites!
This is a thoroughly amoral, despicable defence of the indefensible, as demonstrated by the Contra affairs and many other similar secret FINANCIAL dealings..
Perhaps this is why Trump has garnered the popular vote, even if to thwart an ever worse Clinton era nr. 2...
As dw says, the potential U.S. fall would drag the rest of the 'gobal' countries with it.
TTIP around the corner , a taste of things to come.