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Selective bias driving the Commission’s tax probes – Hayes

Selective bias driving the Commission’s tax probes – Hayes

ECJ has overturned Commission decisions on State Aid in the past

Following the publication of a White Paper by the US Treasury on Wednesday, Brian Hayes MEP for Dublin said that the Commission has taken a selective bias when pursuing state aid cases.

European-Commission1

“A selective bias is driving the European Commission’s recent tax probes. There has been a real propensity from the Commission in recent years to go after large US multinationals based in Europe due to their tax structure. The majority of the big ticket state aid cases that the Commission has taken have been against US multinationals. The four recent in-depth investigations from the Commission all concern US multinationals – Apple, Amazon, Starbucks and Fiat-Chrysler.

“I welcome the US Treasury’s White Paper on the Commission’s state aid cases. It makes clear that the real issues at stake in the Commission’s state aid investigations are matters for the US Treasury and ultimately US taxpayers may have to foot the bill of a negative finding from the Commission. Also, a negative outcome could potentially undermine individual US tax treaties with Member States.

“I recently asked Commissioner Vestager to justify why certain cases are investigated over others on the question of State Aid. In 2014 the European Court of Justice annulled a Commission decision against Spain from 2011 in respect of alleged state aid given to certain companies. This is clear evidence of the Commission overstepped its bounds when it comes to state aid cases by using an expansive definition of what constitutes state aid.

“Commissioner Vestager claims that the ECJ judgement on the Spanish state aid cases has no bearing on the current state aid investigations. It is true that the substance of these cases are different but it cannot hide the fact that the Commission is continuing to pursue its own agenda when it comes to tax probes. Corporate taxation is a matter for Member States and under the Treaties the Commission cannot interfere in Member States’ corporate tax rate policy.

“The recent Commission decisions on tax rulings for the Netherlands (Starbucks), Luxembourg (Fiat/Chrysler) and Belgium have all been appealed, partly on the basis of a violation of Member State sovereignty as regards tax matters, in other words that the expansive interpretation of EU State aid rules by the Commission leads to a de facto harmonisation of taxation ‘through the back door’.

“Member State tax sovereignty is of critical importance, particularly after the UK referendum result. The Commission needs to take stock of the different voices expressing concern in these cases.”

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