The
European Union has launched investigations into whether tax deals offered to
Apple, Starbucks and Fiat by three EU countries violate competition law. The
probes will focus on "transfer pricing."
Deutsche Welle, 11 June 2014
The
European Union's antitrust regulator said Wednesday it is launching three
in-depth probes to investigate whether tax deals offered by authorities in
Ireland, Luxembourg and the Netherlands amount to illegal state aid.
"In the
current context of tight public budgets, it is particularly important that
large multinationals pay their fair share of taxes," EU Competition
Commissioner Joaquin Almunia said.
The probe
will affect multinational companies Apple, Starbucks and Fiat Finance which
have been frequent targets of criticism for paying low taxes in some countries
they operate. In 2012, Starbucks acknowledged that between 2009 and 2012 it had
not paid corporation tax in the UK on sales worth £400 million (485 million
euros, $670 million).
The EU said
it would focus its probe on "transfer pricing," an accounting
technique made possible by carefully crafted tax laws. Transfer pricing is
where a company allows one part of its operations to charge another for goods
or services in one country in order to move profits where it wants.
Almunia
said, while these arrangements are permissible in theory, they could amount to
illegal state aid that discriminated against other member states.
"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," he said.
The Irish
government responded quickly saying it is "confident that there is no
state aid rule breach in this case and we will defend all aspects
vigorously."
hc/rc (Reuters, AFP, AP)
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