Belfast Telegraph

Thursday 24 July 2014

EU probes Apple and Starbucks tax breaks

Starbucks Coffee
Starbucks Coffee

The European Union is launching an investigation into tax deals that Apple, Starbucks and Fiat struck with several European countries to see whether they violate competition law.

EU antitrust commissioner Joaquin Almunia said it appeared the arrangements were not proper, though the companies and countries involved – the Republic of Ireland, the Netherlands and Luxembourg – must be given a chance to respond.

"In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes," he said.

Apple has a deal with tax authorities in the Republic, Starbucks in the Netherlands and Fiat's financing arm in Luxembourg as part of their strategy to minimise the taxes they pay.

Almunia said that while such agreements were permissible in theory, they would be improper if they gave the companies an advantage over competitors.

The companies named have been frequent targets of criticism for paying low taxes in some of countries they operate in. The countries have also been criticised – the Republic for its low tax rates, the Netherlands and Luxembourg as homes for shell companies, and all three for secrecy.

Almunia said the three investigations were part of a wider look into tax rules in various EU countries and "aggressive" tax planning by multinationals, which he said eroded countries' tax bases. He named Belgium as another country whose tax rules his office was examining.

"Why three companies today? Because we are starting," he said in Brussels.

The Republic was quick to respond, issuing a statement that it is "confident that there is no state aid rule breach in this case and we will defend all aspects vigorously".

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