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European Commission launches tax probe into Apple, Starbucks and Fiat European Commission launches tax probe into Apple, Starbucks and Fiat
(about 3 hours later)
The European Commission is set to open an in-depth investigation into the tax practices of Starbucks, Fiat and Apple in three European countries.The European Commission is set to open an in-depth investigation into the tax practices of Starbucks, Fiat and Apple in three European countries.
The probe will examine whether they benefited from special tax deals in Ireland, Luxembourg and The Netherlands.The probe will examine whether they benefited from special tax deals in Ireland, Luxembourg and The Netherlands.
The Commission will focus on so-called transfer-pricing arrangements, under which multinationals shift taxable profit between subsidiaries operating in different countries. Companies must charge their subsidiaries market rates or risk violating EU rules on state aid.The Commission will focus on so-called transfer-pricing arrangements, under which multinationals shift taxable profit between subsidiaries operating in different countries. Companies must charge their subsidiaries market rates or risk violating EU rules on state aid.
"We have reason to believe at this stage that indeed in these specific cases the national authorities have (failed) to tax part of these multinationals' profits," said EU Competition Commissioner Joaquin Almunia at a press conference in Brussels, insisting that big multinationals must "pay their fair share of taxes"."We have reason to believe at this stage that indeed in these specific cases the national authorities have (failed) to tax part of these multinationals' profits," said EU Competition Commissioner Joaquin Almunia at a press conference in Brussels, insisting that big multinationals must "pay their fair share of taxes".
In response, the Irish finance ministry said Apple did not benefit from preferable treatment before setting up its international headquarters in Ireland, where it paid less than 2 per cent tax on its foreign earnings in 2012, prompting criticism that the country serves as a tax haven for the American technology giant.In response, the Irish finance ministry said Apple did not benefit from preferable treatment before setting up its international headquarters in Ireland, where it paid less than 2 per cent tax on its foreign earnings in 2012, prompting criticism that the country serves as a tax haven for the American technology giant.
An Apple spokesperson 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.”
Meanwhile, Starbucks said that its tax deal in The Netherlands, where the group has been using an arrangement which allows it to transfer much of its profits from its European subsidiaries to reduce its taxable income, complies with "all relevant tax rules, laws and OECD guidelines".Meanwhile, Starbucks said that its tax deal in The Netherlands, where the group has been using an arrangement which allows it to transfer much of its profits from its European subsidiaries to reduce its taxable income, complies with "all relevant tax rules, laws and OECD guidelines".
Dutch finance minister Eric Wiebes added: "I am confident that the ultimate conclusion is that there is no question of state aid and that the agreements with Starbucks Manufacturing EMEA BV comply with the OECD guidelines on transfer prices."Dutch finance minister Eric Wiebes added: "I am confident that the ultimate conclusion is that there is no question of state aid and that the agreements with Starbucks Manufacturing EMEA BV comply with the OECD guidelines on transfer prices."
In 2012, the US coffee giant admitted it paid just £8m in tax on £3bn of UK sales since 1998, when it opened its first Starbucks coffee shop in Europe. In April, the company announced it would transfer its European headquarters to London from the Netherlands, meaning it will pay more tax in the UK.In 2012, the US coffee giant admitted it paid just £8m in tax on £3bn of UK sales since 1998, when it opened its first Starbucks coffee shop in Europe. In April, the company announced it would transfer its European headquarters to London from the Netherlands, meaning it will pay more tax in the UK.