“The European Commission has hit back at U.S. concerns about competition probes into transfer-pricing arrangements by U.S.-headquartered companies doing business in Europe including Apple and Amazon,” Renee Cordes reports for TheStreet. “Both are under investigation for sweetheart tax arrangements with national tax authorities that were deemed to constitute illegal state aid in preliminary rulings by the E.C.”
“The probes concern Amazon’s taxes in Luxembourg and Apple’s tax-break arrangement in Ireland, which is now withdrawing its so-called double Irish tax perk over a four-year period,” Cordes reports. “A month before the E.C. is due to rule on Apple, the U.S. Treasury Department laid out its concerns in a 25-page paper released on Wednesday. Among other things, the paper said the E.C.’s probes undermine the multilateral progress made towards reducing tax avoidance. It also alleged the Commission’s approach is inconsistent with international norms and said the regulator should not seek retroactive recoveries — or back taxes — under what it sees as a new approach.”
Cordes reports, “A Commission spokesperson on Thursday said the E.C. takes note of the white paper and insisted that the E.C. is not unfairly targeting U.S. companies.”
Read more in the full article here.
MacDailyNews Take: In Apple’s case, if the EU demands so-called “back taxes,” it’ll be based invisible legal grounds since the company simply followed the law when paying their taxes:
There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws. – Apple CFO Luca Maestri
As we wrote back in April: Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear.
Looks like the EU, as massively bloated, infinitely voracious governmental operations are wont to do, is attempting to rake in even more cash by whatever means possible. Surely if and when they get their mitts on it, they’ll spend it ever so wisely.