Published: Fri, August 26, 2016
Economy | By Melissa Porter

EU rejects US Treasury concerns over tax probe bias

EU rejects US Treasury concerns over tax probe bias

The commission is also investigating Google, but in antitrust cases related to suspicions that the firm is abusing its dominant market position. The tech giant could face a multi-billion pound bill for unpaid taxes.

In a white paper commissioned by US Treasury secretary Jack Lew, the Obama administration warned that Brussels was overstepping its powers and becoming a "supranational tax authority", The Guardian reported on Thursday. "Moreover, 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 report said.

The biggest of the investigations centres on Apple's tax dealings with Ireland.

The Treasury claims that the European Commission has moved the goalposts by changing tack on what it considers to be illegal state aid, and subsequently seeking years of back taxes under its new definition.

"There is a possibility that any repayments ordered by the Commission will be considered foreign income taxes that are creditable against US taxes owed by the companies in the United States", the paper said.

In response to the Treasury report, a European Commission spokeswoman said Wednesday that it is following a " standard feature" of EU law and applying it indiscriminately against companies regardless of where they are from.

US Treasury officials worry that if European regulators fine American companies with high repayments, it would affect the taxes that the US could be potentially collecting. He warned US taxpayers "could wind up eventually footing the bill".

While Europe's handling of corporate tax policy has anxious the Treasury, a commission spokeswoman said European regulators are only trying to ensure that no company receives an unfair advantage in taxation.

The Treasury Department asked Brussels to reconsider its position on the case, arguing that penalizing these firms will cause negative effects for cross-border taxation.

The US has attacked Europe's tax avoidance crackdown on Apple (NasdaqGS: AAPL - news) and other global firms.

Lew has accused the commission of "targeting United States companies disproportionately".

The Apple boss previously said that the money in Ireland is to be subjected to USA taxes and the tax laws state that the company can either keep it there or bring it back. "We've said at 40 percent, we're not going to bring it back until there's a fair rate". Is that legal to do or not legal to do?

Ireland's tax laws are a result of the country's boring and slow GDP growth which led the country to introduce laws that could increase job opportunities and GDP growth.

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