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EU probes Apple, Starbucks over tax rulings

Brussels - 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 authorities.

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 vigorously.

Fiat declined to comment and Starbucks was not immediately available for comment.

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 US 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.

Apple's Irish arrangement helped it achieve an effective tax rate of just 3.7% on its non-US income last year, its annual report shows - a fraction of the prevailing rates in its main overseas markets.

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.

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