US hits out at European Union tax probes
Brussels, January 30
The United States has attacked high-profile EU tax probes into American companies as unfair and encroaching on the US government’s right to tax them, the Financial Times reported today.
The European Commission has cracked down hard on companies, including US icons such as Apple, Starbucks and Amazon, who worked out arrangements with EU member states allowing them to slash their tax bills.
EU Competition Commissioner Magrethe Vestager has made a point of testing these ‘tax rulings’, which are legal in themselves, to see if they breach strict bloc competition rules by giving some companies an advantage over their rivals.
The FT said Robert Stack, a US Treasury official, met EU competition officials in Brussels on Friday to express Washington’s concerns.
“We are concerned that the EU Commission appears to be disproportionately targeting US companies,” Stack was quoted as saying.
Stack’s visit came just one day after the Commission launched plans to stamp out tax avoidance by multinational corporations. “The days are numbered for companies that aggressively reduce their tax bills,” EU Economics Affairs Commissioner Pierre Moscovici said.
The key proposal is that a company should report its profit country by country, rather than as now be allowed to shift earnings around into lower tax jurisdictions. The plans were unveiled amid a storm of protest at a British government agreement for internet giant Google to pay £130 million ($185 million, 170 million euros) in back taxes.
Critics denounced the deal as ridiculously low given Google’s size and earnings but the company insisted the settlement was fair and that it complied fully with the tax laws in the countries where it operates.
Italy is meanwhile demanding Google pay some 200 million euros in back taxes and France reportedly wants 500 million euros after an investigation that included raids by police.
Google and Apple have complained they are being unfairly targeted by the European authorities.
Commission officials were not immediately available for comment on the report but Brussels has rejected charges of an anti-US bias in the past.