Brussels rebuffs U.S. attack on EU tax investigations

Thu Aug 25, 2016 6:38am EDT
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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 AAPL.O and McDonald's MCD.N 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.   Continued...

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