Brussels rebuffs U.S.
attack on EU tax investigations
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[August 25, 2016]
By Julia Fioretti
BRUSSELS (Reuters) - The European
Commission rebuffed an attack by the U.S. Treasury on its
investigations into alleged sweetheart tax deals between companies
such as Apple and McDonald's and European governments, saying there
was no anti-U.S. bias.
The U.S. Treasury Department published a white paper on Wednesday
that voiced concern at the EU executive's tax investigations, saying
they departed from international taxation norms and would have an
outsized impact on U.S. companies.
The European Commission said it treated all companies equally.
"EU law applies indiscriminately to all companies operating in
Europe - there is no bias against U.S. companies. This is very clear
if we look at the facts: In October 2015 the first state aid
decisions on tax rulings concerned a European company, Fiat, as well
as a U.S. company," a Commission spokeswoman said.
It is not the first time the United States has criticised the EU's
tax investigations. In February U.S. Treasury Secretary Jack Lew
wrote to European Commission President Jean-Claude Juncker urging
him to reconsider the EU's approach.
In the white paper, the U.S. Treasury Department said the
Commission's approach departed from prior EU case law and undermined
OECD guidelines on transfer pricing - the setting of prices for the
transfer of goods or services from one subsidiary to another - which
critics say is used to reduce tax liabilities in relatively high-tax
countries.
In addition, the EU should not seek to recover taxes from companies
retroactively, the Treasury Department said, because it was a
departure from prior practice.
"Imposing retroactive recoveries would undermine the G20’s efforts
to improve tax certainty and set an undesirable precedent for tax
authorities in other countries," the white paper said.
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A sign for the U.S. fast food restaurant chain McDonald's is seen
outside one of their restaurants in Sint-Pieters-Leeuw, near
Brussels, Belgium December 3, 2015. REUTERS/Yves Herman
The Commission spokeswoman said EU state aid rules forbid national
governments from giving tax benefits to selected companies that are
not available to others.
"These state aid rules and the relevant legal principles have been
in place for a long time," she said.
The European Commission accused Ireland in 2014 of dodging
international tax rules by letting Apple shelter profits worth tens
of billions of dollars from tax collectors in return for maintaining
jobs. Apple and Ireland reject the accusation. A ruling is expected
in the autumn.
The EU launched an investigation into tax deals between McDonald's
and Luxembourg in December last year.
(Reporting by Julia Fioretti; Editing by Adrian Croft)
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