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David Rosenbloom Comments on EU Tax Probes Prompting Questions About Risk

November 17, 2016, Tax Management Transfer Pricing Reportâ„¢

European Commission tax investigations like the one that presented Apple Inc. with a $14.5 billion tax bill in August are prompting corporate supervisory boards and Big Four accounting firms to probe for risks of future challenges to other companies.

From the Irish view, Apple's tax arrangement was an appropriate economic reward for activities carried on within Ireland, he said.

“Yes, there were untaxed profits, but my view is that these were U.S. profits to be taxed,” Ryan said.

The commission's cases assessing billions in taxes due “get the headlines,” but a better approach would have been to apply the expectation prospectively, not retroactively, he suggested.

H. David Rosenbloom, an attorney at Caplin & Drysdale, Chartered in Washington who teaches international tax law at New York University, agreed with Ryan that most of Apple's tax exposure in the Irish case was likely to be in the U.S., as the business decisions probably at issue were most likely directed from the company's California headquarters.

Facts Needed for Analysis

But Rosenbloom complained that, with nothing more to evaluate than a press release from the commission in the absence of a written opinion, it's impossible to know the facts of the case. Without the facts, it's impossible to analyze the decision, he said.

The commission is redacting the opinion, which is “fair enough,” but that could take a while, Rosenbloom said.

For the full article, please visit Bloomberg Law’s website (subscription required).

Excerpt taken from the article “EU Tax Probes Prompting Questions About Risk” by John Herzfeld for Tax Management Transfer Pricing Report.


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