Filed under: Apple, International Trade, Scandals and Lawsuits, Tax Laws, Investing
By Barbara Lewis
BRUSSELS — The European Commission will publish Tuesday its reasons for opening an in-depth inquiry into the Irish government’s tax treatment of Apple (AAPL), a commission spokesman said.
The European Union’s competition watchdog is looking at whether a number of countries’ benign tax regimes for multinational companies, which helps to attract investment and jobs that might otherwise go elsewhere, represents unfair state aid.
A U.S. Senate investigation into Apple’s tax affairs in 2013 showed how Apple had used Irish-registered companies that were tax resident in no country to shelter tens of billions of dollars in profit from tax.
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Theoretically, if the commission ruled the tax treatment constituted state aid, Apple, the largest company in the world by market capitalization, could be forced to repay billions of dollars in tax savings.
However, some tax lawyers said they doubted the commission could enforce such a ruling and that it is more likely Ireland would simply be forced to change its light-touch approach to taxing multinationals, which other European countries say robs them of tax revenues.
Apple has denied receiving any selective tax treatment from the Irish authorities and the Irish government reiterated on Monday that it is confident it hadn’t breached state aid rules and said it had issued a formal response to the commission this month to address concerns and misunderstandings.
Antoine Colombani, spokesman for Competition Commissioner Joaquin Almunia, said the Commission would publish a non-confidential version of its decision to open the investigation Tuesday.
Formal legal publication will follow a few weeks later in the Official Journal of the European Union and interested parties will then have a month to submit their comments.
These responses will be analyzed by the commission in the context of the continuing investigation, Colombani said.
The commission announced in June that it was investigating Ireland, the Netherlands and Luxembourg over deals they have cut with Apple, Starbucks (SBUX) and Fiat.
Apple has operated almost tax-free in Ireland since 1980, thanks to tax holidays and tax deals given by the government, executives have said.
–With additional reporting by Tom Bergin.
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