European Commission investigates taxation schemes of Apple, Starbucks and Fiat Finance and Trade.

11.06.2014

European Commision opened three investigations concerning the decisions made by tax services of Ireland, Holland and Luxembourg with regards to corporate tax paid accordingly by such corporations as Apple, Sturbucks and Fiat Finance and Trade. EC is going to see whether these decisions are in violation of EU rules on state aid.

A. Šemeta, Commissioner for Taxation, said: "Fair tax competition is essential for the integrity of the Single Market, for the fiscal sustainability of our Member States, and for a level-playing field between our businesses. Our social and economic model relies on it, so we must do all we can to defend it."

The Commission will examine if the three transfer pricing arrangements validated in the following tax rulings involve state aid to the benefit of the beneficiary companies:

• the individual rulings issued by the Irish tax authorities on the calculation of the taxable profit allocated to the Irish branches of Apple Sales International and of Apple Operations Europe;
• the individual ruling issued by the Dutch tax authorities on the calculation of the taxable basis in the Netherlands for manufacturing activities of Starbucks Manufacturing EMEA BV;
• the individual ruling issued by the Luxembourgish tax authorities on the calculation of the taxable basis in Luxembourg for the financing activities of Fiat Finance and Trade.

Source: http://europa.eu/rapid/press-release_IP-14-663_en.htm

Expert’s opinion

Civilized world and EU in particular faced many current challenges and problems with regard to sharp increase in labor productivity.

A lot of people ended up outside of the actual production and are forced to come up with any kind of activities in order to stay sane. One of such activities is to create how to take money from those ones who work with the help of various requisitions and spend it on themselves.

In countries that have only recently felt the charm of European business management, problem of taking money was and is easily solved. They are being taken and are being taken away. It is all right. if after contact with the fiscal authorities, businessmen remain at large and alive. But it depends...

But Europe is not like that. The simple taking of money is no longer comme il faut. Laws that created European western civilization forbid to take away the results of other people’s work and their property. In order to save civilizational achievements and to have more money, it is necessary to come up with such rules that bring the money themselves. Yet we must remember that if you take away a lot, then entrepreneurs will go bankrupt and you will end up with no one. But to feed and entertain lumpen army that will have no job is necessary.

Therefore, they had an idea if corporation is not legally paying taxes, let's explore how they do it. And if we figure it out, then we insert a spoke in the wheel, so they will pay taxes, even if there are without violations. Just so they would be set free.

Sure!, The studies and the creation of visibility of real work and business trips, etc. - Will take a lot of money! Starbucks will sell the same few cubic meters of coffee with thousands of croissants to clerks and officials of various ranges, while they will check on Apple computers how simple Italian guys were chasing money around the world via Luxembourg.

And everyone has his job. And paychecks are coming. And social justice is in place.

The main thing is not to go too far. The main thing is not to extinguish the flame of the entrepreneurial spirit , which provides the entire civilized world and machines, and computers and salaries just by the way without thinking.

Yaroslav Lomakin ( Managing Partner, Honest&Bright)