The US government has retaliatory tools at its disposal ... The Senate Finance Committee has already asked Treasury to investigate whether s 891 applies
The EU's state aid overreach rankles the US tax authorities, which has already complained of the 'unfair targeting' of US multinationals. The state aid decisions undermine US tax treaty policy, and there is a risk that the US government may consider using retaliatory tools at its disposal.
When the EC Competition Directorate injected itself into international tax policy, it set off a firestorm that threatens to undermine years of promising work by the OECD, the G20 and tax authorities from over 60 countries.
To many observers, the state aid decisions in Starbucks and Fiat represent a significant overreach by the directorate outside its traditional areas of focus into a subject matter already being addressed by the Commission separately and as part of the BEPS process.
The state aid decisions are particularly troubling to US multinationals and the US government. In testimony before the US Congress, Robert Stack, Deputy Assistant Treasury Secretary, questioned whether the Commission was disproportionately targeting US multinationals.
While the Directorate denies this, such a view is understandable when four of the six known state aid cases involve well-known US multinationals.
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