EU suggest clamping down on tax havens


European nations must stop offering incentives aimed at attracting companies seeking a haven from the U.S. government’s 35 percent tax on repatriated money. The European Union’s Tax Commissioner Algirdas Semeta Tuesday called on EU member nations to halt “specific incentives” aimed at attracting international corporations such as Apple, Google, Microsoft, Coca Cola and many others.

Semeta’s comments in Brussels follows a week of high-profile discussion of ways Apple and other tech giants filter income through EU nations such as Ireland to avoid paying heftier taxes back home…

Semeta, speaking before the Friends of Europe group, noted some of the 27 EU member nations “have fairly loose or relatively liberal double-taxation agreements with third countries,” reported Bloomberg.

Some member states have fairly loose or relatively liberal double-taxation agreements with third countries.

These very loose agreements actually allow aggressive tax planners to shift their profits through EU member states to third countries and to avoid taxation in general.

In hearing last week, the Senate Subcommittee on Investigations found Apple diverted $74 billion in income through three subsidiaries in Ireland. The investigation revealed Apple payed as little as a two percent tax, substantially below Ireland’s twelve percent tax rate.

According to the report:

Apple told the Subcommittee that, for many years, Ireland has provided Apple affiliates with a special tax rate through negotiations with the Irish government.

While Semeta realizes he cannot prevent EU members from enticing companies with beneficial tax laws, he warned against offering “specific incentives to foreign companies or wealthy individuals” looking to avoid paying taxes.

In response to the charges, Ireland’s leaders have rejected the idea their country is a tax haven or operates differently than other European nations.

Apple reportedly has nearly doubled its spending on tax lobbyists, hoping to impact the debate in Washington, DC.