Sunday 23 October 2016

US multinationals' profits belong to United States - Senior official at global economic think tank

Published 26/09/2016 | 19:34

Stacks of coins and a down trend chart as the background
Stacks of coins and a down trend chart as the background

The international profits of US multinationals belong in the United States, a senior tax official at an influential global economic think tank has said.

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Although declining to comment specifically on the Apple case, Pascal Saint-Amans, the director of tax policy at the Organisation for Economic Cooperation and Development (OECD), suggested the profits of large American technology and pharmaceutical firms should be taxed in the US.

The comments will give a boost to the Government’s argument that the European Commission’s decision concerning Apple is flawed. 

“If we go beyond the pure state aid with its own aspect … you have the question of where does the profits belong to? Who does it belong to. I think there is no ambiguity here, that the bulk of it belongs to the United States,” Mr Saint-Amans said.

“When you look at the broad picture, the tech companies, the pharmaceutical companies, and many businesses, when you look at the broad picture, yes the profit belong to the US, the problem is that the US is not taxing it today, because of the lack of tax policy reform.”

Mr Saint-Amans said there needs to be tax reform in the United States to ensure profits are taxed where the substance of the organisation lies. He also said Ireland was not a tax haven.

The decision by the competition watchdog - criticised by Finance Minister Michael Noonan - found Apple got a sweetheart deal which allowed them to pay as little as 0.005pc tax on European, and some international, profits.

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