The European Commission has opened three in-depth investigations to examine whether decisions by tax authorities in Ireland, the Netherlands and Luxembourg, with regard to the corporate income tax to be paid by Apple, Starbucks and Fiat Finance and Trade respectively, comply with the EU rules on state aid.
Tax commissioner Algirdas Šemeta said: ‘Fair tax competition is essential for the integrity of the single market, for the fiscal sustainability of our member states, and for a level playing field between our businesses. Our social and economic model relies on it, so we must do all we can to defend it.’
The investigations will examine whether the three transfer pricing arrangements validated in the following tax rulings involve state aid to the benefit of the beneficiary companies:
the individual rulings issued by the Irish tax authorities on the calculation of the taxable profit allocated to the Irish branches of Apple Sales International and of Apple Operations Europe;
the individual ruling issued by the Dutch tax authorities on the calculation of the taxable basis in the Netherlands for the manufacturing activities of Starbucks Manufacturing EMEA BV; and
the individual ruling issued by the Luxembourg tax authorities on the calculation of the taxable basis in Luxembourg for the financing activities of Fiat Finance and Trade.
According to George Bull, senior partner at Baker Tilly, the investigations mark a challenge to the role of sovereign nations in tax planning by multinational corporations. ‘Whatever the outcome of the EU enquiry, it’s clear that sovereign nations will be as much in the firing line on international tax avoidance as the companies which they wish to attract to their shores,’ he said.
The European Commission has opened three in-depth investigations to examine whether decisions by tax authorities in Ireland, the Netherlands and Luxembourg, with regard to the corporate income tax to be paid by Apple, Starbucks and Fiat Finance and Trade respectively, comply with the EU rules on state aid.
Tax commissioner Algirdas Šemeta said: ‘Fair tax competition is essential for the integrity of the single market, for the fiscal sustainability of our member states, and for a level playing field between our businesses. Our social and economic model relies on it, so we must do all we can to defend it.’
The investigations will examine whether the three transfer pricing arrangements validated in the following tax rulings involve state aid to the benefit of the beneficiary companies:
the individual rulings issued by the Irish tax authorities on the calculation of the taxable profit allocated to the Irish branches of Apple Sales International and of Apple Operations Europe;
the individual ruling issued by the Dutch tax authorities on the calculation of the taxable basis in the Netherlands for the manufacturing activities of Starbucks Manufacturing EMEA BV; and
the individual ruling issued by the Luxembourg tax authorities on the calculation of the taxable basis in Luxembourg for the financing activities of Fiat Finance and Trade.
According to George Bull, senior partner at Baker Tilly, the investigations mark a challenge to the role of sovereign nations in tax planning by multinational corporations. ‘Whatever the outcome of the EU enquiry, it’s clear that sovereign nations will be as much in the firing line on international tax avoidance as the companies which they wish to attract to their shores,’ he said.
