The US Treasury has warned the European Union of possible repercussions if it attempts to claim back billions in tax from major US multinationals such as Apple. The Treasury said its officials have met with European Commission counterparts several times in recent months on the matter, and the US finance ministry has now issued a white paper outlining its position.
The Commission has been investigating a number of advance tax rulings issued by EU member states that are suspected of giving an unfair advantage to multinationals which use complex parent-subsidiary systems to report minimal profits and reduce their tax bills. The EC has already ordered the Netherlands and Luxembourg to claim back more tax from respectively Starbucks and Fiat Chrysler, and is expected to issue a decision next month on Ireland's deal with Apple, which could result in the company owing billions more in tax.
The US Treasury said these tax payments could have an "outsized" impact on the companies, as well as US tax revenues, if the companies then claim foreign tax credits. The white paper claims the European Commission is taking a "new" approach, which could not have been foreseen by the companies or member states, and as such should not be imposed retroactively.
The EC's approach also undermines US tax treaties and globally accepted practcies in transfer pricing, as developed under the OECD-led BEPS programme, the US said. The Treasury said it would prefer to "the system of international tax cooperation" and work with the EU on a more "mutually accepted" solution that addresses the issue of the continued erosion of the corporate tax base.
