EU opens probe into tax rules of business giants

Oliver Smith
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THE EUROPEAN Commission yesterday opened an investigation into the deals cut by Apple, Starbucks and Fiat with the European countries where they base their tax residencies.

The Commission said it was looking at whether the countries’ tax treatment of multinationals, which help to attract investment and jobs that might otherwise go to where the companies’ customers were based, represented unfair state aid.

“Under the EU’s state aid rules, national authorities cannot take measures allowing certain companies to pay less tax than they should if the tax rules of the Member State were applied in a fair and non-discriminatory way,” said Joaquin Almunia, the European Commission’s vice president in charge of competition policy.

Apple, which bases its tax residency in Ireland, denied that it had received selective tax treatment from Irish authorities, while Starbucks, which bases its tax residency in the Netherlands, said it complied with all tax rules.

“Success and growth come from the hard work of our Irish employees not from any special tax deal with the Irish government,” an Apple spokes-person said.

“We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

The Irish government said it was confident that it has not breached the rules and will defend its position vigorously.

“Our technical experts do not believe that there is any state aid,” an Irish department of finance spokesperson said.

“We will now turn to providing our detailed, technical legal rebuttal of the Commission’s position and if necessary will defend our position in the European Courts.”