Gaspard Sebag Brussels
THE EU will step up its probe of Apple’s tax arrangements in Ireland, revealing why it suspects the iPhone maker received an unfair advantage.
Regulators would publish today the reasoning for opening an investigation earlier this year, Antoine Colombani, a spokesman for the European Commission, said yesterday. The move is the latest step toward possible repayment of millions of euros of aid.
The EU inquiry comes amid a global crackdown on tax avoidance as governments struggle to increase revenue and reduce deficits. The commission has said tax avoidance and evasion in the EU cost about e1 trillion (R14 trillion) a year.
Ireland’s finance ministry said it “is confident that there is no breach of state aid rules in this case”. The government had “already issued a formal response to the commission earlier this month, addressing in detail the concerns and some misunderstandings” in the EU’s June decision to start the probe.
The EU’s investigations focused on so-called transfer pricing arrangements on taxing commercial transactions between company units, the EU’s antitrust arm said in June when it opened formal probes.
Regulators will check if the tax deals constituted illegal state aid. Governments can be ordered by the commission to claw back unfair aid.
Apple’s Irish tax arrangements drew scrutiny in the US last year. The company negotiated a tax rate of less than 2 percent with Irish authorities, a US senate report said in May last year, citing Apple.
Apple representatives in London referred yesterday to statements earlier this year saying it had received no special treatment from Ireland.
In June the Irish government said it understood that the EU was focusing on “advance opinions” given a number of years ago on how a company calculated its taxable base.
As part of the state-aid probe process, the commission will shortly also seek feedback on its decision to probe the tax breaks.
The “commission will then analyse these comments in the context of the ongoing investigation”, Colombani said.
The EU’s preliminary findings on Fiat Finance & Trade’s corporate taxation in Luxembourg would also be published this week, said one person, who asked not to be named because the decision was not public.
Details of a preliminary investigation into Starbucks’s tax deals with the Netherlands would be given at a later stage, the person said.
Fiat declined to comment about the probing of its unit that handles cash management and treasury activities. Starbucks representatives did not immediately respond to a request for comment. The commission in Brussels declined to comment. – Bloomberg