EU says no new wave of tax investigations against US companies

EU competition commissioner Margrethe Vestager played down suggestions of fresh state-aid investigations against US multinationals, as she concluded a three-day tour of the US which was overshadowed by tensions over the recent Apple judgment.

Asked about a tweet on Monday which had suggested that further inquiries could be imminent, Ms Vestager said that this “was not the suggestion,” though she declined to give specifics of any further cases.

During a debate at Columbia University in New York on Wednesday, Ms Vestager defended the European Commission’s record finding last month that Ireland had offered €13 billion in illegal state aid to Apple.

“When a company doesn’t pay its share of tax, it gets an unfair head start over its rivals. So our decisions on State aid to companies like Fiat, Starbucks and Apple are about giving everyone a fair chance to compete. Not just a select few,” she said.

She said that regulators had to be “citizen-centred in the decisions we take,” and enforce competition rules “to ensure that everyone has a fair chance of making it.”

Stiglitz criticism

Economist Joseph Stiglitz, who participated in the video conference alongside Ms Vestager, strongly criticised Apple’s tax arrangements in Ireland, noting that the “first corporate responsibility is paying taxes”.

He called for the EU and the US to impose a global minimal tax of between 15 and 20 per cent on profits, citing the proposal as an example of how the EU and US could “come together to address problems.”

In addition he said that tax havens such as the Channel Islands, Panama and the British Virgin Islands should be shut down.

“There is no reason why they should exist and we should get rid of them…They only exist because the 1 per cent want them,” he said.

Former Italian Prime Minister and competition commissioner Mario Monti, who participated in the debate from Rome, compared the transatlantic tensions over the Apple judgment to the 2001 competition ruling prohibiting General Electric’s takeover of Honeywell.

Tax transparency

Meanwhile in Brussels, the European Economic and Social Committee (EESC) a consultative body representing civic society which feeds into European Commission policy, adopted an opinion supporting the European Commission's moves to increase tax transparency.

While it endorsed the European Commission’s new directive on country-by-country reporting which will oblige companies with turnover of €750 million to disclose more tax information, it said that this threshold should be lowered to include other companies.

Speaking in Brussels, Victor Alistar of Transparency International said in Brussels that the Apple judgment had pushed the issue of tax avoidance into the forefront of public debate, suggesting “room for collusion between governments and big companies.”

Ms Vestager's three-day visit to the US was dominated by discussion of the Apple judgment, with the Danish commissioner holding meetings with US treasury secretary Jack Lew, members of the Senate Finance Committee and chairman of the Federal Trade Commission chairwoman, Edith Ramirez. She said her meetings had included a "quite frank discussion" about Apple and "a very open dialogue" about global tax issues.

Chairman of the Senate finance committee, Orrin Hatch, said that Ms Vestager had “failed to make “an effective case for this highly politicised ruling rooted in an erroneous interpretation of law,” accusing the European Commission of “run roughshod over an American firm by retroactively overriding a tax opinion between a sovereign country and a company.”