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Ireland accused of giving Apple 'selective advantage'

EU launches probe to ponder tax naughtiness by Cupertino, Starbucks and Fiat

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The European Commission will investigate The Republic of Ireland's handling of Apple's tax affairs, after raising concerns that discretion available to the nation's tax authorities “... has been used in the case of Apple to grant a selective advantage to that company, reducing its tax burden below the level it should pay based on a correct application of the tax rules.”

The Commission says it has already looked at Apple's affairs in Ireland, plus Starbucks' activities in The Netherlands and Fiat footling in Luxembourg. After it “reviewed the calculations used to set the taxable basis in those rulings” a “preliminary analysis” found “concerns that they could underestimate the taxable profit and thereby grant an advantage to the respective companies by allowing them to pay less tax.”

The Commission yesterday issued a canned announcement describing the probe as “an in-depth investigation” that “gives interested third parties, as well as the three Member States concerned, an opportunity to submit comments.”

“It does not prejudge the outcome of the investigation.”

The statement says it is motivated by possible favours being handed out by some European nations, as “... national authorities cannot take measures allowing certain companies to pay less tax than they should if the tax rules of the Member State were applied in a fair and non-discriminatory way."

That makes the probe an exercise in considering how Ireland, Luxembourg and The Netherlands behaved, and whether their actions made a mess of EU competition law, rather than a probe into the vendors concerned.

Apple and Ireland will be probed to test whether “the individual rulings issued by the Irish tax authorities on the calculation of the taxable profit allocated to the Irish branches of Apple Sales International and of Apple Operations Europe” were appropriate, and whether Ireland chose to be kinder to Apple than is strictly required by local and EU law.

No timeframe for delivery of a judgement has been named. ®

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