Europe groups fear being caught in US tax crackdown
European multinationals have launched a rearguard effort in Washington to prevent them becoming unintended victims of a US crackdown on tax-driven international mergers.
As the Obama administration finalises plans to curb “tax inversion” deals, big European companies that typically stay out of US politics – including Nestlé, Royal Dutch Shell, Airbus and BASF – are alarmed at the risk to their own US divisions.
US companies are using inversions to shift their addresses to countries with lower tax rates, reducing their US tax bills and putting their non-US earnings beyond the reach of the American authorities.
Jack Lew, the US Treasury secretary, said on Sunday that while the White House wanted to overhaul the whole corporate tax system, “there is one loophole that should be shut down immediately – inversions”.
A spokesman for Airbus, the European aerospace group, said: “It’s important that any legislation or other action be carefully crafted with an eye to ensuring investments in the US are not discouraged.”
Although the Obama administration has sought to attract foreign companies as investors and employers, European multinationals do not have the same natural clout in Washington as their US rivals.
Source: FT- Europe groups fear being caught in US tax crackdown
