Companies Apple, Starbucks and Fiat found themselves at the center of an investigation of tax agreements in Ireland and other countries, carried out by the European Union. In light of the latest investigations, the question is whether the European entrenched practice that foreign companies pay too little tax.
They say that in life two things are secure: death and paying taxes. Apple, Starbucks and Fiat could, however, prove that this is not true. These companies are the subject of an investigation of the European Commission to avoid paying taxes. These three corporations thanks to favorable contracts in Ireland, Luxembourg and the Netherlands saved billions of which, in the opinion of the European Commissioner for Competition Joaquina Teresa Almunia, is not fair.
“Selective tax incentives in favor of multinational companies seriously distort competition in our individual markets. When state budgets are depleted, and the citizens are required to deal with the consequences of the crisis, it is not acceptable that large companies do not pay the proper taxes.”
The investigation could cause turmoil in Europe and not only in those countries. The commission claims that the favorable contracts in three countries actually state aid. However, they are also a key part of their business model why would attempt to change the disputed tax laws could cause discontent in other European countries.
“It might become a very strong political opposition not only in the three countries, but also in the larger states, including the United Kingdom. Even some countries that are technically victims of this type of tax avoidance, do not want the European Union to seriously address this problem, because it is in conflict with their philosophical approach of the Union, “said Reuters journalist and expert on taxes Tom Bergin.
European officials move follows a global trend of pressure on companies to discover ways to avoid paying taxes. U.S. Senate Committee determined last year that the EPL protect tens of billions of dollars in profits from taxation using Irish company that did not pay taxes anywhere.
The company has paid only 3.7 percent tax on the money he earned last year outside the United States. Apple, however, said that they don’t have preferential treatment, while the Irish government also stated that no rules were violated.