EU ruling against Belgian corporate tax breaks may set precedent for decision on Apple
The European Commission on Monday ruled that Belgium broke state aid rules by offering tax breaks to a number of multinational corporations, 35 of which will have to repay $765 million.
Apple's store in the Belgian capital, Brussels.
Belgium's practices hurt competition by "putting smaller competitors who are not multinational on an unequal footing," according to the Commission's competition policy head, Margrethe Vestager.
"There are many legal ways for EU countries to subsidise investment and many good reasons to invest in the EU," she added in her statement. "However, if a country gives certain multinationals illegal tax benefits that allow them to avoid paying taxes on the majority of their actual profits, it seriously harms fair competition in the EU, ultimately at the expense of EU citizens."
The names of the 35 multinationals have yet to be revealed, but may be published later on.
The Commission has been cracking down on several member states, such as Luxembourg and the Netherlands, accused of offering special breaks in order to attract multinationals. Companies that exploited the deals have included the likes of Amazon, Fiat Chrysler, and Starbucks.
The most infamous example however may be Apple, which has funneled much of its non-U.S. revenue through Ireland, exploiting loopholes to pay just 2.5 percent in taxes instead of 12.5. The country is already working to close some of the loopholes, but the Commission is nevertheless continuing with an investigation that could penalize both Apple and the Irish government.
Apple has repeatedly insisted that it simply follows the law and pays everything it owes, but today's ruling could set a precedent that makes it less likely it will escape judgement.
Apple's store in the Belgian capital, Brussels.
Belgium's practices hurt competition by "putting smaller competitors who are not multinational on an unequal footing," according to the Commission's competition policy head, Margrethe Vestager.
"There are many legal ways for EU countries to subsidise investment and many good reasons to invest in the EU," she added in her statement. "However, if a country gives certain multinationals illegal tax benefits that allow them to avoid paying taxes on the majority of their actual profits, it seriously harms fair competition in the EU, ultimately at the expense of EU citizens."
The names of the 35 multinationals have yet to be revealed, but may be published later on.
The Commission has been cracking down on several member states, such as Luxembourg and the Netherlands, accused of offering special breaks in order to attract multinationals. Companies that exploited the deals have included the likes of Amazon, Fiat Chrysler, and Starbucks.
The most infamous example however may be Apple, which has funneled much of its non-U.S. revenue through Ireland, exploiting loopholes to pay just 2.5 percent in taxes instead of 12.5. The country is already working to close some of the loopholes, but the Commission is nevertheless continuing with an investigation that could penalize both Apple and the Irish government.
Apple has repeatedly insisted that it simply follows the law and pays everything it owes, but today's ruling could set a precedent that makes it less likely it will escape judgement.
Comments
Okay, back to reality...
Apple will be named among the list of 35 companies. The fines will be as follows: Apple: $764,999,966, each of the 34 other companies: $1 Justice is served. /s
EU states gave up certain elements of their sovereignty willingly. They knew what they were signing up for. I live in Ireland and I disapprove of the actions of the Irish Government in this matter.
Our corporation taxes are lower than they are in the US - try again.
This is what is going now in Europe. If a member country is breaking the rules, the member country needs to be punished not companies that are following the rules of that company.
Also, we have to understand if we are talking taxes at point of sale or taxes on profits after all hardware taxes are paid. Hmmm, lets tax the tax on the tax of the unit sale price, cause you know we need the money,,, right??
This is about taxes on profits. Sales taxes in the EU are paid by consumers not companies, but companies are required to collect and declare that money - it is never theirs.
I have said this before. The Apple/Ireland deal predates the EU and their rules. Apple had specific deal set up back in the 80's, Apple was one of the first Companies to set up a deal with Ireland. I suspect that some or most of the Apple revenue will be grandfather due to deal pre-dating the existence of the EU rules on government supported business.
With Apple by far the largest of the group, I was curious why the EU did not go directly after Apple, they decided to go after companies who set up deal in the last 90's and early 2000's.
http://www.huffingtonpost.com/h-a-goodman/isis-atrocities-in-iraq-r_b_5661346.html
http://www.businessinsider.com/saddam-husseins-old-party-is-behind-iraq-chaos-2014-6?op=1&IR=T
http://www.huffingtonpost.com/bruce-fein/rand-paul-is-right-republ_b_7552956.html
The Paris bombings, the million plus refugees flooding into Europe, The rapes and assaults on women in Cologne, can all be traced back to the neo-conns and their puppet president.
I am absolutely terrified this ... thing ... might actually become President.
As Apple wasn't the behemoth it is now taxes before that are basically neglable.