{shortcode-27d8d3db1594a39945a095d39c383597dd8d7309} Questions over the taxation of multinational corporations are putting strain on the relationship between the United States and the European Union, experts said at a Center for European Studies event Wednesday.
This lecture follows a tax dispute between Apple and the European Union, which ensued last year after the EU required Ireland to go after the billions of euros in taxes that Apple had dodged through Irish subsidiaries. The EU argued that this amounted to illegal state aid, while the United States contended that the EU investigation could hurt Apple’s profits.
According to José Manuel Martínez Sierra, a faculty affiliate at the Center for European Studies, multinational corporations like Apple are posing new questions for entities that seek to regulate them.
“The traditional approach that it was really easy to tackle a frame or an individual person regardless of where they are living or located is not useful anymore, because of course they can have their headquarters in one country but they might have their social headquarters in a another country,” Sierra said.
The future of dialogue between the United States and the EU on tax issues has become more fraught in the wake of new international policies promoted by President Donald Trump’s administration, according to Stephen E. Shay, a senior lecturer at the Law School.
“I think there is a lot of room for dialogue and for improving U.S. tax relations, but I’m not sure that the current administration is particularly interested in investing a lot of time and energy doing it,” Shay said.
Trump’s election coincided with the introduction of new EU tax reform policies, which João Félix Pinto Nogueira, the Adjunct Academic Chairman of IBFD, highlighted in his presentation. These policies take a firmer stance on taxation of multinational corporations like Apple, a step Nogueira said should involve both the EU and the United States.
However, the disconnect between the EU and United States is only widening, according to Sierra.
“That is where have the problem: that the big players, particularly the U.S., are not willing to commit to rules that will be fair enough for everybody,” Sierra said.
As tax policies continue to change with rising international integration, Sierra emphasized, “we need a global solution and not individual ones.”
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