The US stepped up its fight against the European Commission’s crackdown on tax avoidance by Apple and other multinational companies, accusing the commission of unilateralism and overstepping its mandate.
In a white paper, the US Treasury said the EC probe into alleged special tax treatment that certain EU countries gave Apple, Amazon, Starbucks and Fiat Chrysler “undermines the international tax system.” With potentially billions of dollars in tax levies at stake, the Treasury also reiterated its view that the investigations “disproportionately” target US companies and would prevent Washington from recovering taxes that it is eying from the companies’ offshore earnings.
“These investigations have major implications for the United States. In particular, recoveries imposed by the Commission would have an outsized impact on US companies,” said Treasury Deputy Assistant Secretary for International Tax Affairs Robert Stack in a statement. “US taxpayers could wind up eventually footing the bill” if the commission forces the companies into tax settlements, he said. The US acknowledged the problems around the issue of multinational firms obtaining state aid, in the form of secret and extremely lucrative tax breaks, from Ireland, Belgium and Luxembourg for setting up business in those countries.
But it said those deals were made under international treaties and accepted tax practices. The Treasury accused the EC in the white paper of taking a “new approach” to established European Union tax law in challenging EU member states’ legal tax breaks offered to multinational firms.