Saturday, April 25th2.9°C
24963
25546

EU investigates Apple, Starbucks and Fiat tax agreements in Europe

AMSTERDAM - The European Union's antitrust regulator said Wednesday it is launching an investigation into tax deals that Apple, Starbucks and Fiat struck with several European countries to see whether they violate competition law.

EU antitrust commissioner Joaquin Almunia said it appears the arrangements are not proper, though the companies and countries involved — Ireland, the Netherlands and Luxembourg — must be given a chance to respond.

"In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes," he said in a statement.

Apple has a deal with tax authorities in Ireland, Starbucks in the Netherlands and Fiat's financing arm in Luxembourg as part of their strategy to minimize the taxes they pay.

Almunia said that while such agreements are permissible in theory, they would be improper if they give the companies an advantage over competitors.

The companies named have been frequent targets of criticism for paying low taxes in some countries they operate.

The countries have also been criticized — Ireland for its low tax rates, the Netherlands and Luxembourg as homes for shell companies, and all three for secrecy.

Almunia said the three investigations announced Wednesday are part of a wider look into tax rules in various EU countries and "aggressive" tax planning by multinationals, which he said erodes countries' tax bases. He named Belgium as another country whose tax rules his office is examining.

"Why three companies today? Because we are starting," he said at a press conference in Brussels.

Ireland was quick to respond, issuing a statement that it is "confident that there is no state aid rule breach in this case and we will defend all aspects vigorously."

Almunia was at pains to say he is not criticizing the countries' overall tax regimes. He said the issue in question involves 'transfer pricing' — where a company allows one part of its operations to charge another for goods or services in one country in order to shift profits where it wants.

For instance, Starbucks might charge its own subsidiaries a license fee for using its logo. If it keeps its European licensing arm in the Netherlands and then funnels all the licensing fees there, it could have high profits there and low profits elsewhere.

The Commission said that sort of strategy is only allowable if the prices a company charges its subsidiaries conform to market rates. Otherwise, the companies could lowball their overall taxable profit, giving them an advantage.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15408.33+15.98
S&P CDNX697.70-1.78
DJIA18080.14+21.45
Nasdaq5092.08+36.02
S&P 5002117.69+4.76
CDN Dollar0.8210+0.0002
Gold1175.20-17.60
Oil55.50-0.88
Lumber258.50+3.90
Natural Gas2.531+0.002

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.010.00
QHR Technologies Inc1.38+0.00
Cantex0.035+0.005
Anavex Life Sciences0.43+0.01
Metalex Ventures0.095+0.000
Russel Metals27.16+0.41
Copper Mountain Mining1.15+0.06
Colorado Resources0.095+0.000
ReliaBrand Inc0.004-0.001
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.20+0.00
Decisive Dividend Corporation1.80+0.10

 





FEATURED Property
2250089Original Owner 5 Bedroom plus den
$347,400
more details
image2image2image2
Click here to feature your property
Please wait... loading


What's your score?

There was a time when we would sit down with nothing more than a sheet of paper and a sharp pencil to do the math. Totalling our expenses and subtracting our revenue, the amount left over was the answ...


Do you dare to dream?

Photo: Thinkstock.comI have never been able to understand why some people can only see as far ahead as the end of the current day. Instead of aiming for long term goals, they just wallow in their ever...


Calling on your help!

Has the internet flattened prices as predicted? Has the internet created opportunities for your business to find higher priced markets further afield? Is posting prices on your website a good thing o...

_





26069


Member of BC Press Council


25770