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February 2, 2016updated 04 Sep 2016 10:38pm

EU to continue US multinational tax crackdown despite criticism

News: Commissioner Margrethe Vestager will continue the crack down on tax arrangements.

By CBR Staff Writer

The European Commissioner for Competition has rejected US criticism regarding the tax crackdown on US multinationals like Apple, Starbucks and McDonald’s.

Commissioner Margrethe Vestager has indicated that the crack down on tax arrangements of US companies in the continent is set to continue. Vestager’s comment came three days after senior U.S. Treasury official Robert Stack lobbied with her colleagues.

She said that the arguments of Stack are similar to those presented to a Senate committee in December 2015.

Vestager was quoted by Reuters as saying on the sidelines of a conference hosted by the Global Competition Law Centre: "It is the same argument as we have heard before.

"Just as it is an obvious right for U.S. tax authorities to tax revenues when they are repatriated, it is also for European tax authorities to tax money that is made in the member states."

Starbucks was asked to cough up €30m in back taxes in the Netherlands during December, and faces bigger tax dues in Ireland. The European Commission has already launched an investigation into the tax arrangements of Apple in Ireland.

Amazon is also on the radar of the European Union for its tax arrangement Luxembourg. The European Competition Commission has already requested Luxembourg to provide more information on the corporate tax affairs.

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The commission will be probing how the countries levy taxes on companies as they allegedly shift their profits to lower tax havens through networks of subsidiaries to avoid higher taxes elsewhere.

In January, Google signed a deal with the UK government to pay £130m in back taxes of over a decade.

Google reportedly paid only £20.5m in taxes in 2013 on a revenue of $5.6bn, and those who opposed the deal say that Google’s tax deal is lower that the due.

The European Commission has already received a formal complaint from Scottish National Party following the tax settlement.

Following the deal, Google may have to fork out more taxes in some European countries where it faces scrutiny over its tax dues.

Vestager however said that it is too early to say whether EU will start an investigation into the tax settlement in the UK.


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