Apple $14bn tax ruling: Just first of several US targets in EU crackdown?

Europe's competition boss signals more major US companies could face scrutiny after a US group calls for Apple decision to be overturned.

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EU competition commissioner Margrethe Vestager: "I keep thinking about all the CEOs who just make sure that their companies do pay their taxes. They exist too."

Image: Johannes Jansson/Wikimedia Commons

Ahead of a meeting with her US counterparts in Washington, Europe's competition commissioner, Margrethe Vestager, has indicated she may launch investigations into several more major US companies.

As reported by Bloomberg, Vestager on Friday said in a tweet that she may scrutinize the tax affairs of US companies linked to Business Roundtable, a group whose members include the CEOs of US firms with collective annual revenues of $7tn.

The group published a letter sent to European heads of states, calling for the commission's order for Ireland to recover $14bn in taxes from Apple for alleged illegal state aid to be overturned.

The group's members include CEOs of General Electric, JP Morgan Chase, and American Express. From the tech sector, its CEOs include Cisco's Chuck Robbins, Qualcomm's Steve Mollenkopf, Dell Technologies' Michael Dell, IBM's Virgina Rometty, and Oracle's Safra Catz.

"In the interest of all countries that respect the rule of law, this decision must not be allowed to stand," wrote John Engler, president of Business Roundtable.

"I urge you to work with your colleagues to overturn this decision and seek an end to the use of state aid investigations that override the ability of your country and other EU member states to determine and interpret their own tax laws," he continued.

Vestager will on Monday meet US Treasury Secretary Jacob Lew, who in the wake of the EC's decision against Ireland, said it "reflects an attempt to reach into the US tax base to tax income that out to be taxed in the United States".

One day after Engler's letter was published, Davide Serra, CEO Algebris investments, wrote to Vestager on Twitter: "Apple: so in the USA there are 185 CEO which think it's legal to pay 0.05% Taxes in Europe! @vestager pls check what they pay asap!"

Vestager replied: "I will. And I keep thinking about all the CEOs who just make sure that their companies do pay their taxes. They exist too."

Vestager told German paper Handelsblatt in a story published on Sunday that the EU was within its rights to order Ireland recover taxes from Apple.

"It is 100 percent legitimate to tax profit where it is generated," Vestager told the newspaper. "From our perspective, it is irritating when American companies pay less in taxes than European ones."

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