“U.S. Treasury Secretary Jack Lew called on the European Union to reconsider tax probes targeting U.S. companies on Thursday, arguing that such moves represented disturbing precedents,” Reuters reports. “Lew made the plea in a letter to European Commission President Jean-Claude Juncker and EU antitrust chief Margrethe Vestager.”
While we recognize that state aid is a longstanding concept, pursuing civil investigations – predominantly against U.S. companies – under this new interpretation creates disturbing international tax policy precedents.. We respectfully urge you to reconsider this approach. — U.S. Treasury Secretary Jack Lew
“The European Commission has been pursuing so-called sweetheart tax deals involving U.S. firms such as Apple and McDonald’s in several EU countries, which Vestager says give them an unfair advantage in breach of state aid laws,” Reuters reports. “Apple Chief Executive Tim Cook last month personally lobbied Vestager on the tax case involving Apple and Irish authorities.”
Read more in the full article here.
MacDailyNews Take: Once again, blow up this broken “system” and design a proper one for modern times.
The U.S. corporate tax rate is way too high. Obviously. It forces drastic and convoluted tax avoidance efforts.
Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth. – Apple CEO Tim Cook, May 21, 2013
SEE ALSO:
EU’s plans to tackle corporate tax avoidance hits first roadblocks — February 12, 2015
U.S. Treasury official to meet EU antitrust team over Apple tax deals – January 29, 2016
Apple and Google stand by Europe tax deals; Rupert Murdoch weighs in – January 27, 2016
Apple could trigger global tax war, potential breakdown of the international tax system – January 27, 2016
Apple CEO Cook lobbies EU antitrust chief over Irish back taxes – January 21, 2016
Think Ireland’s corporate tax is unfair? Wave goodbye to Apple and thousands of jobs if it’s changed – November 14, 2015
Apple announces 1,000 new jobs in Ireland as EU tax ruling nears – November 11, 2015
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Apple may have to pay Ireland 10 years of back taxes – April 30, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
US are spot on; reported in the UK last week that most major global corporates are avoiding or paying very little tax, including a whole host of UK companies, so EU need to get real!!
That is exactly what the EU are belatedly doing as indeed is the UK Govt though sadly totally inadequately because firstly they can’t match the Corporations lawyer power and secondly because they don’t want to upset the US. So not quite sure what you mean in saying the US are right in actually trying to tell the EU to lay off its companies when those companies map practices (if they are indeed found to be) are in its territory and unlike the US which has given itself rights to attack foreign companies outside of the US. So lets just say this reeks of hypocrisy at beat.
Socialist governments require high taxation to sustain programs for income redistribution, but few leftist are willing to cancel, curtail, limit, or reduce their precious programs. You want less taxes and fewer taxes? Then rethink your politics.
Cisco, the generalities you repeat here are not accurate at all.
For example: healthcare. Is it more efficient for each city to have competing hospitals, with competing ambulance services, paid for directly by consumers? No modern nation in the world does that, because it simply doesn’t work. The most socialist the medicine, the cheaper costs are overall for everyone. Really.
Get #BernieSanders to sort it out.
Apple are not actually doing anything wrong its the system that needs sorting!
Bernie needs to put some honest to good clarity where corporations don’t have to fiddle with the books to avoid tax even when its legal!
Come on now MDN, you need to get real. While US tax code is broken for individuals, it works quite well for many corporations who have loads of special tax breaks, (cough Boeing, cough, GE, cough United Technologies, cough General Dynamics, cough ……)
There are vast amounts of foreign profits diverted from the US because intellectual property ownership has been consigned to special tax havens (Ireland, Bahama’s, etc.) and huge royalty payments are made (i.e., tax deducted in the US) on this IP to those Low Tax countries. These countries have angled to take a little and provide an opportunity to get a US tax deduction. It’s brazen by these countries to structure tax shelters and handsomely profit. There’s no economic support this activity, no buildings, no infrastructure, no military to protect the Companies assets and ability to do business, just agree to take only 10% instead of the US 35%.
It’s a load of crap and I’m tired of it as a US taxpayer, cause the difference is just falling to me.
As the US middle class continues to shrink and US companys continue to pursue tax reversions and become foreign, the US will not be able to afford it’s massive military capabilities and infrastructure. The world will change quite dramatically, for the worse I expect.
Jack Lew is trying to suggest that this is primarily an EU move against US companies. The reality is that the tax arrangements of companies based anywhere ( including many based within the EU ) are also being scrutinised. It just so happens that many international companies are based in the US.
The EU wants to reduce tax avoidance by any company that trades within the EU, irrespective of where they are based.
Current EU tax regulations are far too complex and there are far too many loopholes that can be exploited. I think that the solution is going to have to be a great simplification of the tax system.
Currently the tax system is based on taxing profits, but it’s commonplace for a company to make special payments to a subsidiary company based in a low tax region in order to make the profit appear to be substantially lower or even non-existent. That’s how Amazon pays only GBP 2.4 million tax on GBP 4 billion turnover and Google appears to be paying merely 2% tax on it’s UK earnings, while local companies have to pay 20%.
This is really hilarious. The headline reads “U.S. Demands” and the article uses “called on” and “made the plea” while the actual content of the letter states “respectfully urge you to reconsider”.
What’s next a headline reading “U.S. delivers ultimanium” with the content of the article stating “wets their pants as they beg on their knees.”?
The real funny thing is that this article is about European Union tax probes, on companies from around the world and from the looks of the article only country is whining. I wonder why that is? I guess citizens of the free and civilized world my see some president and generals at the UN showing charts suggesting that someone is making probes of mass taxation but I think most people are sick and tired of being lead over the cliff coalitions by this loser country.
To top it off, and this is what is really hilarious is that MDN does its diatribe on the US tax laws. Yup it takes a certain type of persona to make a commentary about US tax laws for an article about European tax laws. It sure that comment I read yesterday “The U.S. is not the only place in the world…” but they sure act like it.
Dude. Have some coffee. Take a crap. Think about what you’re trying to say. Relax and type it again. Out of all that I got, “I hate the United States.”
He just hates the USA for water boarding.
Would throwing you in the dunk tank force you to start telling the truth?
It seems all to commonplace that the weight of the worlds problems always seems to be borne on the shoulders of the U.S. and by definition, it’s taxpayers. That would include political tensions, medical outbreaks, global warming, etc.. France doesn’t have Troops in South Korea backing us up, Germany doesn’t have Troops in the U.S. To protect us against Canada or Mexico. Sometimes we get spread to thin helping other countries, so please, indulge us if we start to think that the rest of the world should help us out.
Me thinks you may have come across a little harsh. Would you rather be speaking Russian? Japanese? North Korean?
Butthead.
Thanks for your replies Thelonius, silverhawk1 and Cinerama.
Thelonius, gee is that what you got from reading my post? I guess you don’t see the relevance that could have happened if MDN had made a comment about European tax laws or the European tax probe. I’ll tell you what I get from that, oh wait I already did, an acute case of solipsism. There is no need to hate that.
Silverhawk1, I’ve said it once I’ve said it before, I don’t hate the fifth rate nation that you mention. A touch of pity perhaps but mostly they make me laugh.
Cinerama, that’s a funny view again, my point is that the article is about a European tax probe, and the MDN take is totally irrelevant regarding the article. You should chill a bit there are a lot of world issues that are not related to the U.S. The recent Taiwan earthquake for example that resulted in 94 deaths, has nothing to do with the US so relax, the free and civilized world can has it’s own issues and solutions that are not dependent on the intrusion of others.
I’d love to speak those languages you’ve mentioned on top of the ones I know, what’s your point with that I have no idea.
The rest of the world does help you out. Where do you think your statue of liberty came from?
Translation: US is saying, “OMG! ALL THAT MONEY THOSE COMPANIES EARNED OVERSEAS USING FOREIGN INFRASTRUCTURES, AND PAYING FOREIGN TAXES, THAT’S OUR MONEY!!!! GET YOUR GRUBBY HANDS OFF IT!”