Sunday 25 September 2016

US Treasury asks EU to reconsider tax probes on companies such as Apple

Foo Yun Chee

Published 12/02/2016 | 02:30

US Treasury Secretary Jack Lew. Reuters
US Treasury Secretary Jack Lew. Reuters

US Treasury Secretary Jack Lew has called on the European Union to reconsider tax probes targeting multinational companies such as Apple.

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In a significant intervention, Mr Lew warned that Brussels was creating a "disturbing" precedent with its examination of whether US companies are benefiting from illegal state aid in Europe.

In a letter addressed to European Commission President Jean-Claude Juncker, Mr Lew warned that he had "serious concerns about fundamental fairness" of the EU's tax policy.

Mr Lew said the Commission appeared to be targeting US companies disproportionately and warned they may be more heavily penalised than other companies.

"While we recognize that state aid is a longstanding concept, pursuing civil investigations - predominantly against US companies - under this new interpretation creates disturbing international tax policy precedents," Lew wrote.

"We respectfully urge you to reconsider this approach."

The letter was also sent to EU antitrust chief Margrethe Vestager, according to Reuters.

Ms Vestager has been pursuing so-called sweetheart tax deals involving US firms such as Apple and McDonald's in several EU countries, including Ireland.

In recent weeks Apple chief executive Tim Cook held a private meeting with Ms Vestager, as EU regulators close in on a final decision into the company's Irish tax deals.

European Commission spokesman Ricardo Cardoso acknowledged receipt of the letter.

Mr Cardoso denied any bias against US companies, saying EU laws apply to all companies doing business in Europe.

Ordered

"In its state aid decisions on tax rulings to-date, the Commission has ordered member states to recover unpaid taxes mostly from European companies," he said.

Mr Cardoso said the Commission does not apply its rules retroactively, that it had been in contact with US authorities on several occasions and would give any clarifications required.

Last month, Ms Vestager ordered Belgium to recover about €700m from 35 multinational companies including Anheuser-Busch InBev, BP and BASF because of their participation in an illegal tax scheme.

Irish Independent

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