Tuesday

15th Jun 2021

US accuses EU of bias in tax probes

  • US burger chain accused of dodging more than €1 billion in taxes (Photo: _skynet)

US authorities accused EU regulators of "disproportionately" targeting US firms in their broader efforts to crack down on corporate tax evasion.

US treasury secretary Jack Lew demanded that the EU back off in its probes into the tax practices of big US firms like Apple, Amazon, Starbucks, and McDonald's.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

In a letter seen by Reuters, Lew said pursuing civil investigations against predominately US companies "creates disturbing international tax policy precedents".

The letter, addressed to EU Commission president Jean-Claude Juncker, warns the investigations may unravel "mutual cooperation and respect that many countries have worked so hard to develop and preserve".

Lew's remarks add to the mounting US criticism of the EU and the perception it unfairly targets US companies.

The US concerns are also rooted, in part, in not being able to collect as much tax on foreign profits by US firms if their rates increase in the EU.

The International Consortium of Investigative Journalists in November 2014 cited both Apple and Amazon among the list of some 340 companies that slashed global tax bills after brokering dubious sweetheart deals with tax authorities in Luxembourg.

Some firms paid less than 1 percent of profits shuffled into Luxembourg.

The deals are seen by the EU executive as a form of illegal 'state aid' that gives some businesses an unfair competitive advantage over others that pay much higher tax rates.

The Financial Times reports Apple may have to pay up to $19 billion in back taxes should EU regulators find it benefited from illegal state aid.

McDonald's, based in Luxembourg, is accused of dodging more than €1 billion in taxes in Europe.

Lew's letter follows a recent policy effort by the EU executive to force companies, including US firms, to publicly disclose their taxes and earnings.

The EU Commission, for its part, denies any bias against US firms.

“In its state-aid decisions on tax rulings to-date, the commission has ordered member states to recover unpaid taxes mostly from European companies," said the commission, as reported by the Wall Street Journal.

In January, Belgium was told to recover over €700 million in lost tax revenue after giving preferential tax treatment to some 35 multinationals.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

Investigation

Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. BBC and others boycott Belarus press circus
  2. Report: EU and US to unveil aircraft subsidy truce
  3. Putin refuses to guarantee Navalny will survive jail
  4. Erdoğan agrees to pull out mercenaries from Libya
  5. EU starts sale of first bonds for Covid-19 recovery fund
  6. Germans told not to 'storm pharmacies' for Covid pass
  7. Indonesia warns Covid-19 wave may not peak until July
  8. WTO chief: 'drop trade barriers on Covid-19 treatments'

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. China officially joins Russia as a danger to Nato
  2. German Greens face reality check amid CDU gains
  3. EU Parliament wants Europe to take lead on sea-rescues
  4. MEPs urged to end gas-funding, fix cross-border projects rules
  5. Biden in Brussels - what's in the 'in-tray'?
  6. Yemen foreign minister to EU: to stop the war, talk to Iran
  7. Brexit grumbles overshadow UK summit
  8. Former French PM to work for Russian oil firm

Join EUobserver

Support quality EU news

Join us