US Treasury criticises EU Commission’s tax probes of US firms

The US Treasury Department published a report on Wednesday criticising the way in which the European Commission has been targeting US companies with headquarters in Europe over tax avoidance allegations.

Next month the European Commission is due to give its final verdict on the Apple case next month. The tech giant could face a multi-billion pound bill for unpaid taxes.

The EU Commission is investigating tax deals US firms have created with EU member states.

Apple has been accused of sheltering tens of billions of dollars in Ireland in exchange for creating jobs in the country, a deal that could be considered illegal state aid.

But the US Treasury Department said that the EU has taken a new approach in recent investigations of US companies, about which the companies had no warning. Given the new approach the Treasury says it not reasonable for the European Commission to collect “ back taxes”.

Other major US firms are also under investigation by the European Commission over tax avoidance allegations, including Amazon and Starbucks.

“The Commission is charting a course that sets aside years of multilateral efforts” on tax avoidance, the Treasury wrote. “The Commission’s path runs the risk of the EU being perceived as having used its unique structure to undermine and reverse international progress.”

“We are concerned that the European Commission’s state aid investigations threaten to undermine progress in this area and could create an unfortunate international tax policy precedent,” said deputy assistant secretary to the treasury Robert Stack.

“Over the last several months, treasury secretary Jacob J. Lew and his staff have engaged extensively with the Commission to express our concerns related to its State aid investigations.”