EU: Commission reveals stance on Apple’s tax deals with Ireland

European Commissioner Joaquin Almunia released a much-anticipated letter Tuesday that details the watchdog’s stance on companies’ practice of tax avoidance.

The Commission is eyeing Ireland and other member states for their partnerships with foreign companies including Apple, Fiat and Starbucks, which relocated their tax bracket to the EU for cheaper rates. The Commission is reviewing those agreements on suspicion they may constitute illegal state aid in breach of EU competition law.

On Tuesday, the Commission published a letter sent by Almunia to Ireland detailing tax deals struck in 1991 and 2007, declaring that those deals amount to state aid. Almunia stopped short of labeling those deals as illegal, however.

But the letter did reveal that the Commission’s stance on such agreements is clear: “The Commission is of the opinion that through those rulings the Irish authorities confer an advantage on Apple.”

The letter was dated June 11, say reports.

Both Apple and Ireland deny claims that the tax deals unfairly favored Apple. But authorities say their agreements were “reverse engineered” to ensure Apple had the lowest possible tax bill from Ireland. Reports say that Apple could be facing billions of dollars in fines if the agreements are found to be illegal by the EU.

The Commission is also reportedly investigating similar tax agreements made between Starbuck and the Netherlands, and Fiat and Luxembourg.

Full content: Reuters

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