Apple’s tax payments are under investigation in Europe, the European Commission revealed today.
The tax paid by Apple, Starbucks and Fiat in Europe is being examined by the EC. While the investigation has only started, the EC said a preliminary analysis has raised “concerns”
In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes
“In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes,” said Commission Vice President in charge of competition policy Joaquín Almunia. “Under the EU’s state aid rules, national authorities cannot take measures allowing certain companies to pay less tax than they should if the tax rules of the Member State were applied in a fair and non-discriminatory way.”
The complaint centres on transfer pricing arrangements – how much one part of a company charges a different branch or subsidiary for products or even IP. By racking up those prices, companies can shift money to different countries in order to pay less tax, giving them an unfair advantage, the EC said.
For example, the EC will look at the “calculation of the taxable profit” allocated to Irish branches of Apple, where the company pays lower taxes.
Apple and the other companies aren’t at risk of any punishment: the EC is looking to see if Ireland, the Netherlands and Luxembourg are meeting EU-wide legal requirements. So far, both Ireland and the Netherlands have supplied all the information the EC has requested, but Luxembourg faces infringement proceedings for holding back.
Similar complaints have been raised against Google and Amazon. The latter bases its European operations in Luxembourg, paying £2.4 million in taxes despite posting sales of £4 billion in the UK in 2012.
Disclaimer: Some pages on this site may include an affiliate link. This does not effect our editorial in any way.
