The hefty €13 billion in back taxes the European Commission imposed on Apple should have drawn Europe and the U.S. closer in their common quest to crack down on corporate tax avoidance. The latest ruling by the European Union competition commissioner may not be the last against U.S. multinationals in what is increasingly being viewed as harmful to tax diplomacy. Notably, the Commission has not taken issue with Dublin’s 12.5 per cent rate of corporate taxation. As matters stand, the 35 per cent tax rate in the U.S., compared to Ireland’s 12.5 per cent, is an incentive for American firms to retain the advantage of the deferral clause. Global efforts backed by more than 80 countries to combat cross-border tax avoidance, known as Base Erosion and Profit Shifting, are still at an early stage.

Source: The Hindu September 15, 2016 19:52 UTC