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20 Sep, 2016 12:17

Apple tax penalty only the beginning for US firms, warns EU competition watchdog

Apple tax penalty only the beginning for US firms, warns EU competition watchdog

The European Union Competition Commissioner Margrethe Vestager is sure Apple’s €13 billion fine for unpaid taxes in Europe will not be the last for American companies that don’t like paying taxes.

Davide Serra, CEO and founder of Algebris Investments wrote to Vestager on Twitter: “Apple: so in the USA there are 185 CEO which think it’s legal to pay 0.05% Taxes in Europe! @vestager pls check what they pay asap!”

The commissioner responded: “I will. And I keep thinking about all the CEOs who just make sure that their companies do pay their taxes. They exist too.”

On August 30, a European investigation concluded Ireland provided Apple with a favorable tax rate which allowed the company to pay one percent on EU profits in 2003 down to 0.005 percent in 2014.

Vestager previously ordered the Netherlands to collect up to €30 million in taxes from Starbucks and Fiat Chrysler, while Anheuser-Busch InBev was among 35 companies asked to repay €700 million in back taxes to Belgium. Funneling European profits to Luxembourg may cost McDonald’s $500 million, while Amazon and Google’s parent company Alphabet are also being investigated for tax dealings in Europe.

On Monday, Vestager was in the US, meeting with officials including Treasury Secretary Jack Lew, who has criticized her for what Washington regards as unfair treatment of American companies.

The commissioner has denied any bias toward American businesses in Europe. "If you look at our practice, then you cannot find a US bias. You cannot find the statistics to back up any kind of bias," she said in Washington.

“Just today, we opened an in-depth investigation into Luxembourg's tax treatment of the French electric utility company GDF Suez group – now known as Engie," said Vestager. "Our concern is that tax rulings issued by Luxembourg may have given GDF Suez an unfair advantage over other companies, in breach of EU state aid rules.”