GovernanceRegulationEU Delays Tax Probe of Apple, Amazon and Starbucks

EU Delays Tax Probe of Apple, Amazon and Starbucks

An investigation into whether Apple, Amazon and other companies received sweetheart tax deals from Ireland and Luxembourg will be launched later than previously expected, said the European Union (EU) competition commissioner.

Margrethe Vestager, who was appointed to the post last November, has already announced formal anti-trust charges against Google and the Russian energy giant Gazprom, which potentially face large fines and orders to change their business practices.

However, she said she was no longer on track to make a decision by late spring in the tax cases, which include an inquiry into Starbucks and a unit of Italian motor company Fiat.

There was “an ambition to do all four cases before the end of the second quarter,” Vestager added after giving testimony at the European Parliament (EP) to a committee looking into tax issues. “It is now obvious, with the problems that we’ve been having to get information, this is not possible.”

Another reason for the delay was to avoid making “speed too high a priority” as proceeding too rapidly could turned into criticism of how cases are managed. Vestager did not schedule a new date for the investigation to begin.

“There is no deadline, but we will get there, of course,” she said. “Fast is always better than slow, but it’s always best to be just.”

The tax cases differ from the Google and Gazprom investigations as they are not based on antitrust regulations but on laws aimed at curbing national subsidies that would give an EU member state an advantage in attracting investors.

Unlike in antitrust cases, companies found to have received such aid do not face fines or a finding of wrongdoing. Instead, the European Commission (EC) would impose an order on the country that granted the aid.

This could potentially lead to Apple making repaying substantial amounts to Ireland, while Amazon and Fiat could have to make payments to Luxembourg. A ruling against the Netherlands would leave the government facing an order to collect large sums from Starbucks.

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