The European Commission is investigating Ireland,
the Netherlands and Luxembourg over tax deals with multinationals, a move that
could lead to a formal investigation into illegal sweeteners.
The Financial Times reports that Europe’s competition directorate has asked the
Irish government to explain its system of tax rulings and to provide details of
assurances given to several specific companies.
The FT said that Luxemburg and the Netherlands are also under investigation and
the Commission is seeking details about arrangements with companies including
Apple and Starbucks, according to sources.
The move threatens to open a new front in the global clampdown on tax evasion
through enforcing the EU’s state aid rules, which ban serious distortions of
competition through tax breaks to certain groups.
The US Senate Permanent Subcommittee on Investigations
said last May that Apple told it that it had obtained this special rate of a
maximum 2% through negotiations with the Irish government.
Since 2003 the effective rate on profits has been 2% or less - - in one year,
2011, it was 0.05%.
Apple Inc. used Irish companies, which it regarded as 'stateless,' to avoid
paying corporate taxes to any national government on tens of billions of dollars
in overseas income over a period of four years, according to a report published
by the panel. However, even though stateless, the Apple companies have secret
agreements with Ireland's revenue authorities to also partly operate as resident
companies and be subject to the low rate.
The Irish government denied that a low rate was agreed but it did not rule out
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