EU investigates Apple, Starbucks and Fiat over tax
The European Commission is to open an investigation into the tax affairs of Apple, Starbucks and Fiat in Europe.
The BBC reports that the firms' respective arrangements with Ireland, the Netherlands and Luxembourg will be investigated.
The European Commission will look at whether the companies' tax affairs breach EU rules on state aid.
Competition Commissioner Joaquin Almunia said: "In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes."
The investigations will focus on "transfer pricing", or whether the countries allowed the multinational firms to charge one part of the company over the odds for goods or services from another part of the company as a way of shifting profits.
A 40-page memorandum, published by a Senate committee in the US, claimed: "Ireland has essentially functioned as a tax haven for Apple."
Apple has been funneling profits into Irish subsidiaries or "ghost companies" that had no declared tax residency anywhere in the world, cutting billions from its tax bill.
Apple designated its Irish entities as unlimited companies, which meant it did not have to publish annual accounts.
The Irish arrangement allowed Apple to pay just 1.9% tax on its $37bn in overseas profits in 2012, despite the fact the average tax rate in the OECD countries that make up its main markets was 24% last year.
In 2012, the multinational admitted that it had a special tax deal with the Dutch government which allowed it to transfer money to its Dutch sister company in royalty payments.
The European Commission is also investigating the tax arrangements of Fiat's financial firm, Fiat Finance and Trade, which is headquartered in Luxembourg.
This story has been added to our corporate database. The database powers all our live product guides, giving the score for each company on our rankings tables. Find out more about how we rate companies.
Find out more about our tax justice campaign including our boycott of Amazon.
Ethical Consumer on Google+