Washington / AFP
US Treasury Secretary Jacob Lew told Europe’s powerful competition commissioner that the EU review of tax breaks given to multinationals could have an “outsized” impact on US companies.
In a recent meeting , Lew expressed concerns to Margrethe Vestager, who is leading the campaign to end excessive tax breaks by EU members to huge multinational firms, that US companies would be disproportionately hurt by the move, according to a Treasury account of the meeting.
Lew “expressed his concern that the European Commission is retroactively applying a sweeping new state aid theory with an outsized impact on US companies,” it said.
“He urged the European Commission to reconsider its approach to these investigations,” it said.
In February, Lew said in a letter to Vestager and European Commission President Jean-Claude Juncker that the US felt American companies like McDonald’s, Amazon and Apple were being singled out in the campaign against formerly secret tax breaks the companies were given for operating in certain countries like Luxembourg, Ireland and Belgium.
The European Commission denied that US companies were being targeted, as it was ordering certain countries including Belgium to recover taxes from companies offered excessive breaks. Speaking at a Washington forum later on Friday, Vestager denied that the European Union was applying any retroactive penalties.
“It’s not a fine, it’s not a punishment. It’s illegal state aid being recovered to restore competition,” she said.
If “illegal state aid” — the tax breaks — have been paid out, she said, “it has to be recovered in order to restore the playing field.”
She also rejected the assertion that US companies were being unfairly targeted.
Of some 150 such cases over the past 15 years, “only in a handful of those cases US companies have been involved. So this is absolutely by the European book,” she said.