European Union is examining overseas tax breaks for Apple, Starbucks and Fiat
The European Commission raised pressure on Ireland, the Netherlands and Luxembourg over their corporate tax practices, saying it was investigating deals the countries have cut with Apple, Starbucks and Fiat.
The Commission, the executive body of the European Union, is looking at whether the countries’ tax treatment of multinationals that help attract investment and jobs that otherwise might go to where the companies’ customers are based represent unfair state aid.
Corporate tax avoidance has risen to the top of the international political agenda in recent years after reports of how companies such as Apple and Google use convoluted structures to slash their tax bills.
“In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes,” said Joaquín Almunia, the Commission’s vice president in charge of competition policy, on Wednesday.
Governments have promised to rewrite the rules that govern international tax, but experts said the Commission would struggle to challenge deals that Ireland, Luxembourg and the Netherlands had agreed to under existing rules.
Apple said on Wednesday it has not received any selective tax treatment from the Irish authorities, while Starbucks said it complied with all tax rules. Fiat declined to comment.
The Irish government said it was confident that it has not breached state aid rules and will defend its position.
Eric Wiebes, the Dutch secretary of state for finance, said he was confident the investigation would find the country had not broken E.U. rules. A spokesman for the Luxembourg Finance Ministry declined to comment.