EU hoping to close off corporate tax loopholes utilized by Apple and others
To say that Apple's off-shore tax practices came under scrutiny in 2013 would be an extreme understatement. Though the tax minimization schemes Apple employs overseas are no different than those used by other multinational corporations, the spotlight in typical fashion seemed to shine exclusively on Apple.
That being said, Reuters is reporting that the EU is taking a closer look at how US corporations like Apple use what can sometimes be a complex maze of subsidiaries to reduce their overall tax liability.
The European Commission will attempt to close a loophole that allows companies to cut their tax bill, a top EU official said on Monday, but the EU executive will first need to persuade member countries to back the change.
The Commission wants rules to prevent companies setting up "letter-box subsidiaries" in countries, such as Ireland or the Netherlands, solely to qualify for a softer tax regime and cut their bill.
Algirdas Semeta, the EU's taxation commissioner, wants to insert an anti-abuse clause by the end of next year, allowing authorities to target artificial 'parent-subsidiary' schemes that flout the spirit of the tax code.
Now whether or not the proposed tax clause will gain any traction is an entirely different matter. The report notes that getting smaller EU countries on board may prove challenging to say the least. With so many countries having what often amounts to competing interests, it's hard to see this type of legislation being pushed through.
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