“The United States has sent a message to the European Union: Stop your tax crackdown on American companies or be prepared to suffer the consequences,” Jethro Mullen reports for CNN. “Apple has already warned the investigation could force it to pay a decade’s worth of back taxes to Ireland — estimated by some analysts to be in the billions of dollars.”
“The U.S. Treasury Department on Wednesday accused the European Commission agency behind the probes of going beyond its remit and acting as ‘a supra-national tax authority,'” Mullen reports. “‘These investigations have major implications for the United States,’ said Robert Stack, the Treasury’s deputy assistant secretary for international tax affairs. He warned U.S. taxpayers ‘could wind up eventually footing the bill.’ That could happen, he said, if the companies are forced to pay extra tax to the EU and then claim that spending as a deduction on their U.S. taxes.”
“The Treasury published a white paper detailing its objections, including the fear that other countries could follow the EU example and seek large sums retroactively from both U.S. and EU companies,” Mullen reports. “It urged the EU to give up on its pursuit of the companies, saying it’s considering unspecified ‘”potential responses’ if Brussels doesn’t change course.”
Read more in the full article here.
MacDailyNews Take: There’s nothing like the world’s preeminent superpower playing hardball with some quasi-governmental political confederation that’s already been hit with one very significant defection and the existential threat of widespread desertions hanging over its collective head.
If the EU demands so-called “back taxes” from Apple, 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.
European Commission denies anti-U.S. bias after U.S. Treasury intervention over Apple, Amazon tax probes – August 25, 2016