Following a report yesterday that the European Commission was about to launch a formal investigation into Apple’s tax practices in Ireland, the EU has now officially announced the investigation at a press conference. Bloomberg reports that the investigation will include not just Apple, but also Starbucks and Fiat Finance & Trade SA and will look at “whether the tax deals in Ireland, the Netherlands and Luxembourg are illegal state aid.”
“Special secret deals should be outlawed across the EU,” Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said in an e-mailed statement. “All tax breaks and reliefs should be openly available for qualifying businesses.”
“We need to fight against aggressive tax planning,” Joaquin Almunia, the EU’s competition commissioner, said at a press conference in Brussels. He said it’s “still too soon to anticipate” possible recovery if the EU finds the tax rulings to be illegal.
Apple responded with a statement to Bloomberg following the news claiming that it “pays every euro of every tax that we owe” and that it “received no selective treatment from Irish officials.” Apple’s full statement is below:
“Apple pays every euro of every tax that we owe,” the company said in an e-mailed statement. “We have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”
Apple last year faced a U.S. Senate hearing on its offshore tax practices in which it denied taking advantage of any tax loopholes in Ireland. The SEC also closed its own investigation without establishing any wrong-doing in October of last year.
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Saying the company pays all of the taxes it owes is meaningless. So the company isn’t a deadbeat. Big whoop.
Apple and other companies routinely get government subsidies for operating in certain locations and in certain ways. These are, effectively, government subsidies that may or may not produce benefits for the community.
A better question would be whether Apple’s operations are being subsidized by citizens of the locations where it has operations.
Are Apple’s neighbors better off than before they moved in?
No the only issue here is if Apple is doing anything illegal, the morality of it doesn’t matter. If the EU decides to change its laws to close what they perceive is a loop hole then they are welcome to do that. but don’t run around threatening a company for by playing by the rules that they set. If they don’t like the rules then change them. They have the ability to do that.
Exactly… What this really is; chest and drum beating… They want to get some air-time to get support for reform and best way to do that is to ‘Investigate’ Apple. Always brings headlines.. Easy to go after the big boy, less people complain.. They might even get some cash fines out of it.. For EU, it’s a Win/Win…
Reality is, the system that is setup is so difficult to change because they basically have to step on the toes of Ireland and other countries right to pick their own rates of tax..
Google and Microsoft are paying the SAME tax rates Apple is. This is pushed as ‘Apple’ news; but reality is most International businesses are doing the same thing.. The real target here is Ireland.. make no mistake..