“Starbucks Corp. and a Fiat Chrysler Automobiles NV unit must each pay as much as 30 million euros ($34 million) in back taxes after the European Union said they were handed illegal fiscal deals by the Netherlands and Luxembourg,” Stephanie Bodoni reports for Bloomberg. “The decision now sets up a showdown with Apple Inc. and Amazon.com Inc., which are also embroiled in the two-year-long tax probe. “‘Tax rulings that artificially reduce a company’s tax burden are not in line with EU state aid rules. They are illegal,’ Margrethe Vestager, the EU competition commissioner, said in an e-mailed statement. “I hope that, with today’s decisions, this message will be heard by member state governments and companies alike. All companies, big or small, multinational or not, should pay their fair share of tax.'”
“Documents leaked by a group of investigative journalists showed that Luxembourg alone struck hundreds of secret fiscal deals known as tax rulings with companies from around the world, from PepsiCo Inc. to Walt Disney Co. Amazon, which has more than 1,000 people working in the tiny nation, said in July its taxes could increase in case of a negative decision by the EU in its case,” Bodoni reports. “Luxembourg disagrees with the European Commission’s conclusions and ‘will use appropriate due diligence to analyze the decision of the commission as well as its legal rationale,’ the country’s finance ministry said in a statement… The Dutch government said it ‘is somewhat surprised about the decision’ that Starbucks received state aid. The EU’s conclusion ‘raises a lot of questions and requires careful consideration. The Netherlands is convinced that actual international standards are applied and shall, therefore, analyze the commission’s criticism carefully before taking a decision on further steps.'”
“Starbucks said it ‘shares the concerns expressed by the Netherlands government that there are significant errors in the decision, and we plan to appeal since we followed the Dutch and OECD rules available to anyone.’ Starbucks said it paid $3 billion in global taxes between 2008 and 2014,” Bodoni reports. “Fiat ‘did not receive any state aid’ and ‘any finding in this matter would be immaterial to the FCA Group’s reported results,’ the company said in an e-mailed statement on Tuesday.”
“Vestager said regulators are still poring over cases involving Amazon, Apple and the system of fiscal rulings in Belgium. They are all different and will each be assessed on their merits, Vestager told journalists in Brussels Wednesday. Additional cases may also be in the pipeline, she said,” Bodoni reports. “‘We do not stop here. We continue the inquiries into tax rulings in all EU members states,’ Vestager said at a press conference.”
Read more in the full article here.
MacDailyNews Take: In Apple’s case, if the EU demands so-called “back taxes,” it’ll be based invisible legal grounds since the company simply followed the law when paying their taxes:
There was no special deal that we cut with Ireland. We simply followed the laws in the country over the 35 years that we have been in Ireland. If the question is, was there ever a ‘quid pro quo’ that we were trying to strike with the Irish government – that was never the case. We’ve always been very transparent with the Irish government that we wanted to be a good corporate citizen… If countries change the tax laws, we will abide by the new laws and we will pay taxes according to those laws. – Apple CFO Luca Maestri
As we wrote back in April: Apple has repeatedly and confidently stated that they didn’t do anything that was against the law. Therefore, unless the EC tries to change the law retroactively, if that’s even possible, or tries to collect taxes retroactively in some other fashion, Apple is in the clear.
Looks like the EU, as massively bloated, infinitely voracious governmental operations are wont to do, is attempting to rake in even more cash by whatever means possible. Surely once they get their mitts on it, they’ll spend it ever so wisely.
SEE ALSO:
Apple tax probe won’t hurt Ireland, Finance Minister Noonan says – October 5, 2015
EU’s Vestager says will not complete tax inquiries of Apple, others in second quarter – May 5, 2015
Apple warns of potential ‘material’ financial damage from European tax probe – April 29, 2015
Ireland’s Prime Minister: Apple has nothing to fear from end of ‘Double Irish’ tax avoidance strategy – November 4, 2014
Apple says it may lose Irish tax break – October 31, 2014
Ireland to end tax lures that drew U.S. firms – October 14, 2014
EU tax probe spotlights Ireland’s allure for multinationals – October 13, 2014
EU watchdog to give reasons for inquiry into Ireland’s tax treatment of Apple – September 29, 2014
European Commission accuses Apple of prospering from illegal Irish tax deals – September 28, 2014
EU threatens expanded probe into Ireland’s tax practices regarding Apple, Googles, other companies – June 20, 2014
EU’s investigation of Apple’s taxes isn’t going to cause the company any problems – June 13, 2014
EU launches tax avoidance investigations on Apple, Starbucks, Fiat – June 11, 2014
Not in Taxes anymore: On site at Apple’s famous Irish ‘headquarters’ – November 2, 2013
Regan: U.S. tax code spurs loveless foreign corporate ‘marriages’ – May 13, 2014
Ireland to close Apple’s tax loophole, but leave bigger one open – October 15, 2013
G20 think tank OECD proposes blueprint for global crackdown on tax avoidance – July 19, 2013
Thomas Sowell on Apple, corporate taxes, and ‘the road to serfdom’ – May 28, 2013
Taxing Apple just taxes you – May 24, 2013
Don’t tax Apple, tax its shareholders – May 24, 2013
If Apple paid more tax, we might pay less or something – May 22, 2013
Apple CEO Tim Cook pounds another nail into the Keynesian coffin – May 22, 2013
Apple CEO Cook makes no apology for company’s tax strategy – May 22, 2013