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US blasts EU over ‘bias’ in tax probe of American firms

US Treasury official in charge of international tax policy, Robert Stack

The United States has denounced European Commission for its ‘unfair’ probe of American companies in EU’s tax investigations.

Robert Stack, the US Treasury official in charge of international tax policy, visited Brussels on Friday to express Washington’s fears about bias in the commission’s high-profile tax investigations, according to the Financial Times.

Stack said the commission had targeted US companies such as Apple, Amazon, Starbucks and McDonald’s 

He also accused the EU of targeting funds that were owed to the US Treasury.

“We are concerned that the EU commission appears to be disproportionately targeting US companies,” Stack said after his meetings with EU officials.

Because tax policy is technically a competence of the member states, the commission has taken a novel and contentious approach to tackling the “sweetheart” tax deals given to leading multinationals by some EU countries.

The commission has argued that these accords constitute a form of illegal “state aid”, in effect defining tax rulings as an illegal subsidy that gives companies an unfair advantage over their rivals.

But Stack retorted that the EU was misguided in using the state-aid weapon retrospectively to override tax arrangements legally agreed with member states.

“The retroactive application of these new approaches calls into question the basic fairness of the proceedings,” he said, adding that the tactic was liable to trigger uncertainty among US investors in Europe.

He added that the EU was seeking to tax income that should ultimately be payable in the US. “We are greatly concerned that the EU commission is reaching out to tax income that no member state had the right to tax,” he said.

This issue is highly divisive because public and political anger is growing on both sides of the Atlantic that US multinationals have mastered the art of accumulating vast stockpiles of largely untaxed international earnings.

However, the US Treasury argues that most of this money is simply deferred and will have to be repatriated for taxation in the US, although there is no precise timetable for this.


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