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Friday 22 August 2014

Probe into Apple tax affairs 'may turn its focus on other firms'

Donal O'Donovan

Published 21/06/2014 | 02:30

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Apple is reportedly planning to release a smartwatch with multiple screen sizes
Apple is reportedly planning to release a smartwatch with multiple screen sizes

THE European Commission could widen the investigation into whether computer maker Apple has gotten an unfair tax treatment here to look at more companies.

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The EU investigation already under way is examining whether Ireland, Luxembourg and the Netherlands have provided unfair state aid to three companies by helping them avoid potential tax bills elsewhere, news agency Reuters said last night.

The probe is looking into tax paid by Apple in Ireland, Fiat Finance in Luxembourg and Starbucks in the Netherlands.

Commission officials now believe other companies here may also have benefited from generous treatment, and want this country to change its approach so companies cannot shift so much profit through Ireland into tax havens, a source told Reuters.

"The Commission has told Ireland it may go after other companies if it does not fix the problem," the source said, without naming the companies.

But here, a spokesman for the Department of Finance said the Government has not been warned about any possible expansion of the probe.

"We haven't received any warnings, the current investigation is looking at one company only and we are not aware of anything beyond that," the spokesman said.

The amount big companies do, and don't, pay in tax has come under an intense spotlight over the past 12 months.

Ireland has come under pressure both in the US and Europe not only for the relatively low official corporation tax rate but in particular for claims that profit shifting by companies often through subsidies registered here allows big global firms to be close to tax free in terms of their global earnings.

Apple has denied it receives any preferential treatment from authorities here.

The Government insists tax rulings for all companies are in line with international practices.

"Member states' tax incentives should never be used to lure profits away from where they should rightfully be taxed," EU tax commissioner Algirdas Semetas told a meeting of EU finance ministers in Luxembourg yesterday that was attended by Michael Noonan.

"We must verify that the principles of fair play are not being undermined," Mr Semetas said.

If the Commission can prove Ireland's tax treatments for Apple were not in line with international rules, it could deem any corporate tax savings to be a form of subsidy, which must be halted or even repaid.

Irish Independent

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