A&M Tax Minute
While tax leaders at some technology companies may still be spinning in the aftermath of the BEPS initiative and the European Commission’s state aid crackdown (e.g., the 13 billion Euro tax bill directed at Apple last year), recent events suggest that the real haymaker at U.S. tech companies operating in the EU may be yet to come (and possibly soon).
The first indication of an even stronger EU crackdown on U.S. tech companies came in an interview in mid-August with the newly appointed French Finance Minister Bruno Le Maire indicating that France and Germany would soon announce a set of new, “simpler” tax rules for “real taxation” of U.S. (and other non-EU) tech companies operating within Europe. It almost seemed as if France and Germany had not heard of (or perhaps had no confidence in) the BEPS changes. Their new proposal was recently introduced and discussed, along with other proposals, at a September 16th meeting of the finance ministers from 10 EU countries.
Although it is currently unclear what the various proposals from this Gang of 10 will produce, the central theme is simple: U.S. tech companies doing business in Europe should pay the same tax that European tech companies pay; and BEPS just doesn’t get that done.
One thing that the BEPS initiative notably averted..