Member states, not EU enforcers, developed ‘novel’ approach to taxes, Laitenberger says

6 April 2017 12:30pm

29 March 2017. By Lewis Crofts.

The European Commission has rejected claims that it invented a novel legal standard to claw back unpaid taxes from companies including Apple, Starbucks and Fiat Chrysler Automobiles.

A senior EU official said today that it was governments in the European Union that had developed a novel approach to handing out tax benefits to multinationals.

"I don't think that the approach the European Commission has chosen is, on substance, novel," Johannes Laitenberger, director general in the commission's competition department, told a conference in Washington, DC.

"What we have seen is a novel development of tax planning" in the member states, he said.

"It should not have come as a surprise that the European Commission would have to look at this from a state-aid perspective."

US politicians have criticized the EU authorities for using antisubsidy laws to order governments in Ireland and the Netherlands to claw back taxes from Apple and Starbucks.

They argue that EU competition commissioner Margrethe Vestager is misapplying state-aid laws, contravening global tax norms and claiming funds due for the US tax coffers.

Laitenberger explained that the EU's approach to selective tax treatment went back decades.

Older cases looked into country-wide programs that might have benefited a group of companies, but Laitenberger said his officials were now focusing more on individual corporations that had received special treatment.

"What has not changed is our response to fixing the competition distortions that such selective advantages give," he said. "What has changed is the way that member states have implemented certain tax rates."

Laitenberger said there is not yet a final calculation on how much money Apple has to repay to tax authorities. The commission has estimated the amount at up to 13 billion euros, but the Irish government is still making its own calculation.

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