E.U. Commissioner on Apple Ruling https://t.co/oCec8um5zD via @nytvideo
— U.S. Citizen Abroad (@USCitizenAbroad) August 30, 2016
Today the E.U. ruled that the “tax deal'” that Apple negotiated with the Government of Ireland violated the E.U. prohibition on “State Aid”. Understand that this decision was NOT about taxation. It was about the Government of Ireland giving a benefit to one company (zero tax) which they wouldn’t give to other companies. It just so happened that the benefit given was a generous tax deal.
Anxious to characterize the E.U. decision has a “tax related decision” (probably because the United States perspective is that EVERYTHING is about taxation), the Obama Treasury commissioned a “White Paper” which was released on August 24. (You can read it below.) The “White Paper” is evidence of a standard of hypocrisy which should be an embarrassment for even the administration of Barack Obama. One of the objections (among many) was that (assuming that this is about taxation, which it actually is not) the E.U. was engaging in “retroactive” tax enforcement.
See the following from page 15 of the Obama Treasury White Paper:
III. The Commission Should Not Seek Retroactive Recoveries Under Its New Approach
Where State aid involves impermissible subsidies provided through the tax system, the Commission requires the Member State to recover the amount of tax that, in the Commission’s view, should have been imposed in the first place. These amounts can be significant, since the Commission can require recovery for up to ten prior years, with interest for the period the illegal aid is granted until the aid is recovered.
In Fiat and Starbucks, the Commission has ordered the Member States to recover the allegedly unpaid tax with respect to prior tax years.
Because the Commission’s approach in the State Aid Cases is new and was not foreseeable by the relevant companies, recovery of past allegedly unpaid tax would constitute retroactive enforcement of a newly adopted approach to State aid.
With no indication of the Commission’s new approach, U.S. companies have been receiving transfer pricing rulings from EU Member States for decades and had no reason to doubt their legality. Under these circumstances, recovery of past allegedly unpaid tax would be inconsistent with EU legal principles and the Commission should void retroactive enforcement.
As I read the complaint of the Obama Treasury, I thought that …
III. The U.S. Treasury Should Not Seek Retroactive PFIC Penalties Under Its New Tax Treatment of Americans abroad
Where the investment in mutual funds involves impermissible tax deferral provided through the retirement planning system, the U.S. Treasury requires the American living abroad to pay the “interest charge” imposed on investing in a non-U.S. mutual – the amount of tax/interest that, in the Treasury’s view, should have been imposed in the first place. These amounts can be significant, since the United States Treasury can require recovery for many years dating back to 1986, with interest for the period that the illegal mutual fund was owned until the interest is recovered.
In Streamlined and OVDP, the IRS has ordered the taxpayer abroad to pay the allegedly unpaid interest charges with respect to prior tax years.
Because the U.S. Treasury’s approach in the treatment of Canadian (and other non-U.S. mutual funds is new and was not foreseeable by the taxpayers abroad, recovery of past allegedly unpaid tax and interest charges would constitute retroactive enforcement of a newly adopted approach to IRS treatment of Canadian mutual funds.
With no indication of the IRS’s new approach, U.S. citizens living abroad have been investing in non-U.S. mutual funds purchased from non-U.S. mutual fund companies for decades and had no reason to doubt their legality. Under these circumstances, recovery of past allegedly unpaid tax, interest and penalties would be inconsistent with fair tax principles and the U.S. Treasury should avoid retroactive enforcement.
There’s hypocrisy, extreme hypocrisy and the Obama administration!
@EmBee
@pacifica777
@Norman Diamond
Many thanks!
@All
I am a statutory relinquisher, so I have no vote to cast. Nevertheless, I applaud Republicans Overseas for the work they’ve done to bring attention to FATCA and CBT, for their support of the Bopp lawsuit, and even for their role in the important injunction just announced in Israel. I am also impressed that our issues have been so clearly delineated in the current Republican platform. In a normal election year, it truly would be a “no-brainer” to support the GOP, in the hope that they would reciprocate with a concerted effort to repeal FATCA and CBT.
But this is no ordinary election year, and events have fully and tragically overtaken our single-issue politics. I would now easily defer our concerns for the next eight years or more, if it would keep Donald Trump from getting anywhere near the White House. He is a clear and present danger, not only to the United States of America, but to the entire world. I am no fan of Hillary Clinton either – she has a tractor trailer’s worth of suspect baggage – but only a self-delusional fool would ever consider Trump to be Presidential material, or the better choice of a bad lot.
It is impossible to separate the man from the party he has hijacked (by a shameless and successful appeal to its most extreme fringe elements – pushing any remaining moderates out of the tent in the process) so the Republican platform is now utterly irrelevant as long as that egomaniacal, fascistic, xenophobic, racist, misogynistic, pathetic excuse for a human being leads the party. Nothing else matters this year except keeping him as far away as possible from the Presidency. With that primacy in mind, the Republican platform – including the bright shiny objects that bring hope to us expats – may have to be sacrificed for the greater good, not unlike the calculus of the 1% who consider us to be an acceptable level of collateral damage in their little global tax competition war.
So, this simply is not the year for making cynical, Faustian bargains to advance our agenda at all costs. Rather, this is a critical, historic juncture, demanding sober reflection about our planet’s very fate if Donald Trump acquires the most powerful job in the world. It is an utterly terrifying prospect, and I spit in the eyes of all who would dare to justify or condone the behaviour, or grandiose and bellicose fantasies, of this craven and despicable demagogue. There is no middle ground here – none whatsoever. Either you truly care about the fate of the human race, or you’re with that fucking terrorist.
“He is a clear and present danger, not only to the United States of America, but to the entire world.”
So is the war-monger.
“only a self-delusional fool would ever consider Trump to be Presidential material”
And only a criminal would consider Clinton to be Presidential material.
Are you going to vote for a third party or are you going to spoil your ballot? (Not that it matters to those who have already renounced, and it won’t matter to our colleagues who found that all roads lead to renunciation.)
C’mon, Norm, is that really the best you can do? “I know you are, but what am I?” What is this, Pee Wee’s Big Adventure?
Deckard I understand that you’re attacking me but I don’t understand the details of the attack.
The idiot is an idiot, the criminal and war-monger is a criminal and war-monger, the US doesn’t understand third parties, and the world is in trouble no matter which wins.
I think I understand “I know what you are, but what am I?” but don’t understand how that relates to the discussion. Again, I think I understand that you’re insulting me but I don’t understand the insult.
I never saw a Pee Wee movie. I only recall reading that he was arrested for something that Clinton’s husband got off for, and apparently Weiner got off too, but Gary Hart didn’t, too bad. And Canada’s royal family enjoy sovereign immunity.
” I am no fan of Hillary Clinton either – she has a tractor trailer’s worth of suspect baggage – but only a self-delusional fool would ever consider Trump to be Presidential material, or the better choice of a bad lot.”
Then I’d suggest that since you have no vote… voting for Hillary is not a solution either. It’s those affected by the lack of moral integrity exhibited by the Democrats either vote for a third party candidate that meets their progressive viewpoints or stick with a third party Libertarian if you are normally a Republican.
Any one who says. “I’m going to vote for Hillary because the thought of Trump getting into the White House.” when they have the choice to spoil their ballot or vote for a third party to gain a stronger voice for that party, deserves nothing but contempt.
If one intends to vote for Hillary then don’t complain if FATCA continues to be the monkey on your back.
I haven’t been on this site for a while, so please excuse me if I’m raising a topic that I suspect has already been covered. Since these comments have moved from EU/Apple/tax to partisan politics, may I shift down a gear to nonpartisan politics. Specifically voting. Has there been suggestion that those who are eligible should exercise their right to vote?
I suspect many of our problems would evaporate if we had meaningful political representation. Of course the electoral college system and overseas voting procedures dilute our impact, even if we all voted for the same candidate. But there is the issue of swing states.
In 2000, Bush beat Gore by 537 votes in Florida to win the election. If any swing states are won by a narrow margin in 2016, and it could be shown that the number of overseas voters in that state exceeded the margin, then I imagine our concerns would start to get taken more seriously. We might find ourselves with political representation!
The US voting system is a little odd. If Republicans get 60% of the vote in, say, Texas, then Texas votes Republican. The other 40% are basically counted as having voted Republican. Many states are either committed Republican or Democrat states from one election to the next, but a number switch allegiance from one election to the next; so-called swing states. The list of swing states for 2016 is, more or less:
Colorado – 9
Florida – 29
Iowa – 6
Michigan – 16
Nevada – 6
New Hampshire – 4
North Carolina – 15
Ohio – 18
Pennsylvania – 20
Virginia – 13
Wisconsin – 10
Overseas Americans who are eligible to vote in any of these states should enroll and vote. The number after each state represents the number of votes each state casts. If overseas Americans could influence the Florida vote with 29 electoral college votes, that would be much more significant than, say, Nevada with only 6.