Starting in February, Patently Apple posted a report titled "U.S. Treasury Secretary Calls on the EU Commission to Reconsider their Tax Probes targeting U.S. Companies," followed by a report in March titled "U.S. Treasury Investigates Retaliatory Measures against the EU's Aggressive Investigation of Apple & Others." It's being reported on today by the BBC that "Next month the EU is expected to deliver its decision on Apple. The company could be hit with a multi-billion pound bill for unpaid taxes."
Earlier today the U.S. Treasury Department published a white paper on the matter titled "The European Commission's Recent State Aid Investigations of Transfer Pricing Rulings," and concluded by stating the following:
"The U.S. Treasury Department continues to consider potential responses should the Commission continue its present course. A strongly preferred and mutually beneficial outcome would be a return to the system and practice of international tax cooperation that has long fostered cross-border investment between the United States and EU Member States. The U.S. Treasury Department remains ready and willing to continue to collaborate with the Commission on the important work of ensuring that the international tax system is fair, efficient, and predictable." The full 26 page document could be downloaded here.
The BBC report noted that The Treasury Department noted in their report that the White Paper noted that "the actions by Brussels would make it into a 'supra-national tax authority' overriding the tax codes of its member states." The BBC further note that the report stated that "Brussels was using a different set of criteria to judge cases involving US companies, adding that potential penalties were "deeply troubling."
It's been reported on many times that JP Morgan, an investment banker for Apple, has said the company could face a bill for $19bn (£14.3bn) in a worst-case scenario.
Today's response by the U.S. Treasury was one last chance at making it very clear and very public that the U.S. would be prepared to retaliate against a negative ruling against Apple or other major U.S. companies by the EU Commission. The BBC report noted that "In response the commission said it was trying to ensure EU law was applied equally to all companies operating in Europe," a position that hasn't changed since the exchange with the U.S. Treasury began. For more on this read the full BBC report here.
While this was playing out earlier today, Apple's CEO is preparing to host a fundraiser for Hillary Clinton tonight. In July Advisor to Clinton's Economic Plan, Joseph Stiglitz, called Apple's Irish tax set-up a Fraud. "Here we have the largest corporation in capitalization not only in America, but in the world, bigger than GM was at its peak, and claiming that most of its profits originate from about a few hundred people working in Ireland -- that's a fraud," Stiglitz said.
With Apple friends like that, who needs enemies? Then again, perhaps Cook is looking for more support for his gay rights agenda or realistically understands that when it comes to Clinton, it's all about Pay to Play.
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