The European Union’s antitrust regulator is cracking down on corporate tax avoidance.
The European Competition Commission said it has opened a formal investigation into whether tax deals offered to Apple (AAPL) in Ireland, Starbucks (SBUX) in Netherlands and Fiat's finance arm in Luxembourg violated antitrust laws. EU regulators are concerned that the deals may have given the companies unfair competitive advantages.
Yahoo Breakout Host Jeff Macke doesn’t begrudge corporations for looking for ways to save money, “Companies are going to do this. They are going to look for a lower rate, and frankly as share-owned companies, as public companies, they kind of have the reponsibility to try to save this money.”
However, Macke said, “It’s up to Congress to get in front of it and try to come up with collecting some sort of taxes as opposed to just leaving trillions overseas.”
The European Commission’s competition commissioner Joaquin Almunia, said in a statement: "Under the EU's state aid rules, 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."
Apple denied it had received any selective tax treatment from Irish officials, while the Irish government said it was confident that its tax arrangements with Apple didn’t breach state aid rules. It also said it would defend its position vigorously.
A Starbucks spokesperson said in a statement, "We comply with all relevant tax rules, laws and OECD guidelines and we're studying the Commission's announcement related to the state aid investigation in the Netherlands." Meanwhile, the Dutch government said it was confident that its tax dealings with Starbucks didn’t not violate any EU laws.
And Fiat's said it’s finanace arm, Fiat Finance and Trade which is headquartered in Luxembourg is compliant with regulations in the country.
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