Thoughts on Treasury's White Paper on EU State Aid

4 Pages Posted: 22 Sep 2016

See all articles by Jeffery M. Kadet

Jeffery M. Kadet

University of Washington - School of Law

Date Written: September 5, 2016


The U.S. Department of the Treasury on August 24 issued a White Paper that expresses its concerns about the European Commission’s efforts to apply the European Union’s State aid restrictions to multinational enterprises’ profit-shifting structures. This article comments on two aspects of the white paper that are technically correct, but require a little more explanation for readers to understand their significance. These two aspects are:

First, the article clarifies that the general comments that the White Paper makes about “call[ing] into question the ability of Member States to honor their bilateral tax treaties” might be true, but the specifics of the various targets of the Commission's investigations involve no U.S. treaties. This is because the U.S. MNCs concerned are using profit shifting structures that use tax haven companies and not U.S. companies that could claim the benefits of U.S. tax treaties.

Second, the White Paper states that there may be an effective transfer of tax revenues from the U.S. to the EU. Yes, there is the “possibility” that additional foreign taxes paid as a result of these state aid investigations could merely shift tax revenues from the US to the EU. However, the article shows that this is simply not a serious or real possibility.

Keywords: Repatriation, Foreign Tax Credit, FTC, White Paper, European Commission, Apple, International Tax, Tax Treaties, DTT, Treasury

JEL Classification: H21, H25, K34, E62

Suggested Citation

Kadet, Jeffery M., Thoughts on Treasury's White Paper on EU State Aid (September 5, 2016). Tax Notes International, Vol. 83, No. 10, p. 877, Sept. 2016. Available at SSRN:

Jeffery M. Kadet (Contact Author)

University of Washington - School of Law ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States

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