investigates tax rulings on Apple, Starbucks, Fiat unit
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[June 11, 2014]
By Adrian Croft
BRUSSELS (Reuters) - The European
Commission said on Wednesday it had opened three in-depth investigations
into tax decisions affecting Apple, Starbucks and Fiat Finance and Trade
in Ireland, the Netherlands and Luxembourg respectively.
The probes focus on whether decisions by authorities in the three
European Union member states about corporate tax to be paid by the
three companies comply with state aid rules.
Corporate tax avoidance has risen to the top of the international
political agenda in recent years amid reports of how companies like
Apple and Google use convoluted structures to slash their tax bills.
The EU said its investigation follows reports some companies have
received significant tax reductions through rulings by national
Apple said it has not received any selective tax treatment from the
Irish authorities, while the Irish government said it was confident
that it has not breached state aid rules will defend its position
Fiat declined to comment and Starbucks was not immediately available
Starbucks told a UK parliamentary investigation in 2012 that it
received a tax deal in the Netherlands which allowed it to enjoy a
"very low" tax rate, while a U.S. Senate probe last year revealed
that Apple had sheltered tens of billions of dollars in profits from
tax by using Irish companies that had no tax residence anywhere.
Apple in the United States entered into deals with the Irish
subsidiaries whereby the Irish units received the rights to certain
intellectual property that were subsequently licensed to other group
companies, helping ensure almost no tax was reported in countries
such as Britain or France.
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Apple's Irish arrangement helped it achieve an effective tax rate of
just 3.7 percent on its non-U.S. income last year, its annual report
shows – a fraction of the prevailing rates in its main overseas
Tax rulings are used in particular to confirm transfer pricing
arrangements, covering prices charged for transactions between
various parts of the same group of companies.
The Group of 20 leading nations has launched a drive to develop new
rules to tackle abusive transfer pricing and other forms of
corporate profit shifting.
(Editing by Erica Billingham)
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