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European Commission


Brussels, 11 June 2014

Statement by Vice President Almunia on opening of three investigations on transfer pricing arrangements on corporate taxation of Apple (Ireland), Starbucks (Netherlands) and Fiat Finance and Trade (Luxembourg)

Today the Commission has opened three in-depth investigations to examine whether decisions by Ireland, the Netherlands and Luxembourg with regard to the corporate income tax of certain specific companies, are in line with EU state aid rules.

More precisely, these investigations relate to "tax rulings" with, respectively, Apple (in Ireland), Starbucks (in the Netherlands) and Fiat Finance and Trade (in Luxembourg).

"Tax rulings" are individual decisions by tax authorities which inform the tax payer. These instruments are a kind of "comfort letter" sent by the authorities to companies or individual citizens on tax matters.

We have serious doubts about the compatibility of these three particular rulings decisions with the Treaty rules on state aid. We are not putting into question "tax rulings" in general, but particular decisions for three companies in three Member States.

It is well known that some multinationals are using tax planning strategies to reduce their global tax burden. These aggressive tax planning practices erode the tax bases in our Member States.

In particular some multinationals attempt to reduce the profits they declare in countries where taxes are higher. This is mainly achieved through transfer prices, namely the prices charged for commercial transactions between entities which are part of the same corporate group.

And this is where state aid control at the EU level gets into the picture.

If in a tax ruling, the authorities of a Member State accept that the remuneration of a subsidiary or a branch does not correspond to market conditions, reflecting normal conditions of competition, then it would mean that this company could be granted a favourable treatment, a "selective" one.

This is the problem, because such treatment would constitute state aid within the meaning of our Treaty rules. And such aid is in principle incompatible with the Single Market, because it would give these companies an unfair advantage and would distort competition.

Let me remind you that the Commission's powers to control state aid in the EU do not call into question the general tax systems of Member States. What constitutes state aid is the granting of selective tax advantages.

This means that 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.

Today we are opening these three formal investigations because we have reasons to believe at this stage that in these specific cases the national tax authorities have renounced to tax part of these multinationals' revenues by allowing them to lower their taxable profits.

Of course, what I am announcing today is the opening of in-depth investigations, based on a preliminary analysis. Before taking a decision, we will look carefully at the comments by the Member States concerned and all interested third parties who want to send us comments.

But let me state that I regard investigations in this area as extremely important. Selective tax advantages to the benefit of multinationals seriously distort competition in the EU Single Market. Moreover, when public budgets are tight, and citizens are asked to make efforts to deal with the consequences of the crisis, it cannot be accepted that large multinationals do not pay their fair share of taxes.

On top of the investigations regarding Apple in Ireland, Starbucks in the Netherlands and Fiat Finance and Trade in Luxembourg, the Commission decided today to open an infringement procedure against Luxembourg, because the authorities of this country answered only partially to our requests for information in relation with the use of tax rulings and also in relation to way special tax regimes for intellectual property rights – so-called "patent boxes" – are being used.

Contacts :

Antoine Colombani (+32 2 297 45 13 @ECspokesAntoine )

Yizhou Ren (+32 229-94889)

For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by e­mail

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