U.S. raises concerns over European tax probe involving American companies

The U.S. Treasury took the unusual step Wednesday of publishing a detailed critique of the European Commission’s investigations into alleged tax avoidance schemes by a group of U.S. firms, including Apple, Starbucks and Amazon.

Treasury said the commission’s probes into whether U.S. firms unfairly benefited from low corporate tax rates in Europe “undermine” agreements on international tax law and could hurt U.S. taxpayers.

“These investigations have major implications for the United States,” wrote Robert Stack, deputy assistant secretary for international tax affairs at Treasury, in a blog post explaining the agency’s position.

Treasury’s actions are not a defense of these U.S. companies’ actions, but rather signal a disagreement with European authorities over how to resolve the delicate matter of who benefits from overseas profits.

https://www.washingtonpost.com/busi...69871e-6a31-11e6-8225-fbb8a6fc65bc_story.html

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In the latest case, Apple seems to have stepped on its own crank by parking money subject to U.S. taxes in Ireland. The kitty's grown in size so much that the EU now sees it as nice, easy $19 billion tax plum ripe for the picking, so it will be fighting with the U.S. Treasury over it like pigs at a trough fighting over slop. I'm guessing that with more than $2 trillion in unrepatriated profits by U.S. corporations parked overseas, we'll see more of these investigations and fines as a means for cash-strapped governments to get their hands on a piece of it.

Ahlevah said:

In the latest case, Apple seems to have stepped on its own crank by parking money subject to U.S. taxes in Ireland. The kitty's grown in size so much that the EU now sees it as nice, easy $19 billion tax plum ripe for the picking, so it will be fighting with the U.S. Treasury over it like pigs at a trough fighting over slop. I'm guessing that with more than $2 trillion in unrepatriated profits by U.S. corporations parked overseas, we'll see more of these investigations and fines as a means for cash-strapped governments to get their hands on a piece of it.

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Its part of a tax avoidance probe by the EU commissioner in charge. Been going on for a while, and has resulted in Ireland redoing their tax system/deal with among others Apple, so that Apple actually will pay some taxes in Europe. The goal however is to bully member nations to finally take a stand against tax havens, and that will be so much easier now that the UK is out of the EU, since most major tax havens are with in its borders.

Who has a problem with big corps paying their fair share of taxes? I sure don't as the owner of two small businesses that has to pay his.

Either pay your taxes in your home country or pay them where you try and shirk your taxes. No issue with it here.

PeteEU said:

Been going on for a while, and has resulted in Ireland redoing their tax system/deal with among others Apple, so that Apple actually will pay some taxes in Europe.

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Except that Apple and Ireland deny that Apple received any special favors. :shrug:

Ahlevah said:

Except that Apple and Ireland deny that Apple received any special favors. :shrug:

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Apple deny it, but Ireland has admitted partly that they did as they have changed their laws. The "Apple tax" will go null and void soon or already has, so Apple will have to pay a much higher rate of tax in Ireland. They have basically plugged the hole that made it possible.

Ahlevah said:

In the latest case, Apple seems to have stepped on its own crank by parking money subject to U.S. taxes in Ireland. The kitty's grown in size so much that the EU now sees it as nice, easy $19 billion tax plum ripe for the picking, so it will be fighting with the U.S. Treasury over it like pigs at a trough fighting over slop. I'm guessing that with more than $2 trillion in unrepatriated profits by U.S. corporations parked overseas, we'll see more of these investigations and fines as a means for cash-strapped governments to get their hands on a piece of it.

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- The money was not "subject to US taxes" under the law.
- The EU and some of its members are quite messy about its legislation and retroactive application in a number of sectors. This is one reason that there are qualms about the CETA and TTIP agreements.
- IT is really quite iffy, to make a company pay taxes following later court decisions of another jurisdiction retroactively that the legal government of the jurisdiction responsible for the taxes had confirmed must not be paid. This is a question of reliability of law and business conditions in the EU. If investors cannot rely on the member states' legal decisions it becomes somewhat more difficult to do business there and invest. There is a case concerning nuclear plants having been closed without compensation being arbitrated just now. This has nothing to do with tax but with the deeper concern of relying on countries to honor their legal codes.

EnigmaO01 said:

Who has a problem with big corps paying their fair share of taxes? I sure don't as the owner of two small businesses that has to pay his.

Either pay your taxes in your home country or pay them where you try and shirk your taxes. No issue with it here.

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There should be no issue. It is only that the tax structures used were legal in the jurisdictions and under international law. The EU is here trying to grab money retroactively from the investors instead of the countries that guaranteed the legality of their law.
ITis much the same as the NSA having spied in Germany. It was well known and mostly even allowed in a written contract by the Chancellery. But it was later used as massiv propaganda against the US for domestic politics. This disinformation of the populace has left a very negative impression in the haeats and minds sphere and makes many international dealings much more difficult or even impossible.

Ahlevah said:

Except that Apple and Ireland deny that Apple received any special favors. :shrug:

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This is exactly the point. They didn't as far as is known. The jurisdiction took decisions within, what it portrayed to be its legal mandate. Apple behaved as it was told by the representatives of the state it should. I am also quite sure that the government thought that it was totally legal under the Lisbon treaty.*)

*) If it was not, the Lisbon treaty reduced the sovereignty of the members much more than was told the populations at the time. This could make the treaty unconstitutional in a number of member states.

joG said:

- The money was not "subject to US taxes" under the law.

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While it's true that a U.S.-based corporation's earnings are taxed only upon repatriation, Apple's world-wide earnings are subject to taxation by the U.S. Treasury, since its global headquarters is located in Cupertino, Califnornia.

Ahlevah said:

While it's true that a U.S.-based corporation's earnings are taxed only upon repatriation, Apple's world-wide earnings are subject to taxation by the U.S. Treasury, since its global headquarters is located in Cupertino, Califnornia.

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And I am sure that the IRS gets its legal share, when the law says it should.