The Apple logo is pictured inside an Apple store at a shopping district in Tokyo June 26, 2014.YUYA SHINO/Reuters
The European Union will step up its probe of Apple Inc.'s tax arrangements in Ireland, revealing why it suspects the iPhone maker received an unfair advantage.
Regulators will publish tomorrow its reasoning for opening an investigation earlier this year, Antoine Colombani, a spokesman for the European Commission, said in an e-mail. The move is the latest step toward possible repayment of millions of euros of aid.
The EU inquiry comes amid a global crackdown on tax– avoidance as governments struggle to increase revenue and reduce deficits. The commission has said tax avoidance and evasion in the EU cost about €1-trillion ($1.3-trillion) a year.
Ireland's finance ministry said it "is confident that there is no breach of state aid rules in this case." The government "already issued a formal response to the commission earlier this month, addressing in detail the concerns and some misunderstandings" in the EU's June decision announcing the probe.
The EU's investigations focus on so-called transfer-pricing arrangements on taxing commercial transactions between company units, the EU's antitrust arm said in June when it opened formal probes. Regulators will check whether the tax deals constituted illegal state aid. Governments can be ordered by the commission to claw back unfair aid.
Two per cent Apple's Irish tax arrangements drew scrutiny in the U.S. last year. The company negotiated a tax rate of less than 2 per cent with Irish authorities, a U.S. senate report said in May 2013, citing Apple.
Apple representatives in London referred today to statements earlier this year saying it got no special treatment from Ireland.
In June, the Irish government said it understood that the EU was focusing on "advance opinions" given a number of years ago on how a company calculated its taxable base.
As part of the state-aid probe process, the commission will shortly also seek feedback on its decision to probe the tax breaks.
The "commission will then analyze these comments in the context of the ongoing investigation," Colombani said.
The EU's preliminary findings on Fiat Finance & Trade SA's corporate taxation in Luxembourg will also be published this week, said one person, who asked not to be named because the decision isn't public. Details of a preliminary investigation into Starbucks Corp.'s tax deals with the Netherlands will be given at a later stage, the person said.
Fiat SpA declined to comment about the probing of its unit that handles cash management and treasury activities. Starbucks representatives didn't immediately respond to a request for comment. The commission in Brussels declined to comment.
The Irish Times earlier reported the developments in the tax probes.