Thursday, August 25, 2016

Tax Dispute: US government attacked EU for Apple – THE WORLD

To the American software giant Apple is a transatlantic dispute flared up: While the EU commission checks whether Apple has wrongly paid too little tax in the European Union, the Americans defend the company.

Up to $ 19 billion payments could the group in Europe threaten if Apple should prove control agreement with Ireland under the EU competition law as illegal. The US government is concerned for their high-tech companies. They therefore switched directly in the dispute with the EU Commission, and even threatened with consequences.

The dispute between the EU and Apple is not new: It results from the practice of many US companies to handle their profits in Europe through subsidiaries in Ireland – because there are very low tax rates. The Group manages over daughters Apple Operations International and Apple Sales International in Ireland his entire foreign business, can rely on low Irish corporate taxes, thus saving taxes in the US as well as in other EU countries.



Even Amazon and Starbucks are affected

In the meantime, the Commission has taken action against such deals. Check the competition watchdog under Commissioner Margrethe Vestager whether the deal with the Irish Revenue Commissioners may constitute an unfair advantage over the competition. In this case, Apple would have according to an analysis of the investment bank JP Morgan to pay his entire foreign sales in recent years, the regular Irish corporate tax of 12.5 percent, which would correspond to an additional payment of 19 billion dollars.

in addition to Apple and Amazon and Starbucks are the focus of EU investigators. The Commission’s decision is expected in September after years of investigations.

Apple had always resisted the charges of tax: CEO Tim Cook had said on the occasion of an investigation by the US Congress in 2013 that Apple every dollar have paid taxes, was the group guilty.

Photo: REUTERS / X90034 Apple CEO Cook

In an interview with the “Washington post” few days ago, Cook had again expressed on the allegations and said that he would legally taxed parked gains in the United States in Ireland. However, only under one condition: he will not return the money to the United States before there is not a corporate tax reform will realized. “The EU’s allegation is that Ireland has made us a tax-discounted. Ireland denies that.”



The process is controversial

that now Ireland’s tax authorities could be forced by the European Commission there for access, where the US tax collectors so far can not be accessed, meets with the US government to indignation: on Wednesday, the US Treasury published a paper, are in the unusually strong words: “the US Treasury is considering potential responses if the Commission should maintain its current price.” Exactly how these responses might look, is not described.

The process is controversial, in part because the Americans usually take claim for themselves, enforce anywhere in the world US tax law. Switzerland is forced repealing its tax secrecy for the famous banks. Other states they constrained to similar tax rules.

now accuse the EU Americans wrongly to usurp the role of an EU-wide fiscal control per se and in particular to assess US companies unilaterally. This had jeopardized international agreements to combat tax evasion. The Commission would, as US officials, undermine the international tax system. In particular, payments in this amount are without precedent and would bring legal uncertainty.

The formulations fall significantly sharper than in the diplomatic relations between the EU and the USA usual , In a brief statement commented a spokesperson for the Commission that the EU is in no way biased against US corporations in their investigations. The sound is rough in this matter.

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