Hayes claims ‘selective bias’ in EU state aid investigations

Fine Gael MEP Brian Hayes has accused the EU of "selective bias" in its targeting of certain US firms in competition and state aid investigations.

Echoing criticism contained in a US Treasury White Paper published on Wednesday, Mr Hayes said the EU Commission had a propensity to go after large US multinationals based in Europe due to their tax structures.

"The majority of the big-ticket state aid cases that the commission has taken have been against US multinationals," he said, noting the four recent investigations concerned Apple, Amazon, Starbucks and Fiat-Chrysler.

In its White Paper, the US treasury issued a stern warning to Brussels, claiming it was acting like "a supra-national tax authority" and that its stance in targeting US firms could damage EU-US relations.

Washington also claimed that American taxpayers could end up footing the retrospective tax bills imposed by the commission on US multinationals operating in Europe.

The commission is due to rule on whether Ireland breached state aid rules by agreeing a favourable tax deal with Apple.

The Irish Government, which could be in receipt of a major tax windfall from an adverse finding against Apple, has defended the State's arrangement with the company.

Negative outcome

Mr Hayes said he welcomed the treasury White Paper as it made clear the issues at stake in the EU Commission’s state aid investigations. “A negative outcome could potentially undermine individual US tax treaties with member states,” he said.

The MEP said he recently asked the EU's competition commissioner, Margrethe Vestager, to justify why certain cases of state aid were investigated over others.

"In 2014, the European Court of Justice annulled a commission decision against Spain from 2011 in respect of alleged state aid given to certain companies," he said."This is clear evidence of the commission overstepping its bounds when it comes to state aid cases by using an expansive definition of what constitutes state aid."

Recent commission decisions on tax rulings for the Netherlands regarding Starbucks, Luxembourg (Fiat/Chrysler) and Belgium have all been appealed, partly on the basis of a violation of member states' sovereignty concerning tax matters.

“Member state tax sovereignty is of critical importance, particularly after the UK referendum result,” Mr Hayes said. “The commission needs to take stock of the different voices expressing concern in these cases.”

Apple’s use of Irish subsidiaries to shelter tens of millions of dollars of overseas profit from US corporate tax rates was criticised by a US senate panel three years ago, prompting an EU investigation.