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'European Commission' Articles

Apple to Attend EU Hearing on Tuesday to Discuss Taxes

Apple, Google, McDonald's, and IKEA representatives will be in Brussels on Tuesday to discuss their tax deals in Europe, reports Reuters. The hearing will be hosted by the European Parliament's tax committee, but the lawmakers do not have the power to order any changes, according to the report. Nevertheless, the meeting should raise some important questions about each company's compliance with EU tax rules in the past and present. Apple is one of several multinational corporations that have been targeted for possible corporate tax avoidance in Europe. In September 2014, the European Commission formally accused the iPhone maker of receiving illegal state aid from Ireland, where it has reportedly paid a reduced tax rate of around 1.8% on it overseas profits. Apple operates multiple subsidiaries in Ireland to pay significantly less tax outside of the U.S., where it earns up to 60% of its revenue. The company's $64.1 billion in profits generated from 2004 to 2012 could be subject to a higher 12.5% tax rate, in which case it would owe more than $8 billion in back taxes. A decision in the tax probe was originally expected in late 2015, but the European Commission's request for additional information has pushed the investigation into 2016. Last week, EU competition chief Margrethe Vestager told reporters "don't hold your breath" in terms of when the commission will make a decision. Apple previously said it pays all of its taxes and added that it would appeal any decision made against the company. Update: While Reuters says the hearing will take place on

EU Competition Chief on Apple Tax Probe: 'Don't Hold Your Breath'

A decision in the European Commission's probe of Apple's tax affairs in Ireland may not be reached soon, according to EU competition chief Margrethe Vestager (via Bloomberg).“Don’t hold your breath,” she told reporters in Brussels on Monday about the timing of decisions targeting Apple and online shopping giant Amazon.com Inc, whose tax affairs in Luxembourg are also under intense scrutiny. “I’m just warning you.”Apple is one of several multinational corporations, alongside Amazon, McDonald's, Starbucks, and others, that have been targeted for possible corporate tax avoidance in Europe. Brussels launched the probe in June 2014, and it formally accused the iPhone maker of receiving illegal state aid from Ireland three months later. If Apple's $64.1 billion in profits generated from 2004 to 2012 are subjected to a 12.5% tax rate, compared to its current foreign tax rate of about 1.8%, the company could owe more than $8 billion in back taxes. Apple continues to deny any wrongdoing, and vows to appeal any decision that goes against the company. Apple operates multiple subsidiaries in Ireland to pay significantly less tax outside of the U.S., where it earns up to 60% of its revenue. A decision in the tax probe was originally expected in late 2015, but the European Commission's request for additional information has pushed the investigation into 2016. Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow

Tim Cook Visits Europe to Meet EU Antitrust Chief, Pope Francis and Italian Developers

Apple CEO Tim Cook traveled to Europe this week to meet with European Commission antitrust chief Margrethe Vestager in Brussels on Thursday, before heading to Rome on Friday to meet Pope Francis and Italian developers. Cook first met with Vestager to lobby against an European tax investigation that could force the iPhone and iPad maker to pay more than $8 billion in back taxes on overseas earnings, according to Bloomberg. European Commission headquarters in Brussels (Image: Hungary Today) Apple is accused of operating multiple subsidiaries in Ireland to avoid paying higher taxes outside the United States, where it earns just under 60% of its revenue. Apple books its taxes in Ireland using low operating costs, allowing it to pay a foreign tax rate of only 1.8%, according to the report. If the European Commission finds wrongdoing with Apple’s corporate arrangement in Ireland, the company's $64.1 billion in profit generated from 2004 to 2012 could be subject to a higher 12.5% corporate tax rate -- just over $8 billion in back taxes. A decision in the probe could be made by March, but may take longer due to additional information requested by European regulators. Apple continues to deny any wrongdoing, and vows to take the European Commission to court over any negative verdict. Meanwhile, the agenda of Cook's meeting with Pope Francis remains private. The 15-minute discussion was held at 11:30 a.m. local time. Pope Francis is known to incorporate technology into his position and takes to Twitter fairly regularly to share messages, and his old iPad was

Apple Could Owe More Than $8 Billion in European Tax Probe

Apple could owe more than $8 billion in back taxes if the European Commission finds issue with the iPhone maker's corporate tax policies in Ireland, according to analysis by Bloomberg Intelligence. Apple is one of several multinational corporations that have been scrutinized for corporate tax avoidance in Europe over the past few years. The European Commission began Apple's tax probe in June 2014, and formally accused the iPhone maker of receiving illegal state aid from Ireland three months later. The company's $64.1 billion in profit generated from 2004 to 2012 could be subject to a 12.5% tax rate, compared to its current foreign tax rate of about 1.8%, depending on the outcome of the investigation. A decision in the probe is expected in Brussels by March, possibly after the 2016 Irish election. Apple's tax breakdown in Ireland (Image: Bloomberg Intelligence) Apple operates multiple subsidiary companies in Ireland to pay significantly less tax outside the U.S., where it earns about 55% of its revenue. Apple continues to deny any wrongdoing, and both the company and Ireland vow to take the European Commission to court over any negative verdict. Last month, Apple agreed to pay 318 million euros in Italy to settle an investigation that accused the company of booking profits generated in Italy through an Irish subsidiary, in an effort to lower its taxable income base and save 879 million euros between 2008 and 2013. Italian regulators concluded that tax probe in March. Note: Due to the political nature of the discussion regarding this topic, the discussion

European Probe of Apple's Irish Tax Policies Extended to 2016

A decision in the European Commission probe of Ireland's alleged "sweetheart tax deal" with Apple will likely be delayed until after the Irish elections in early 2016, as Financial Times reports the executive cabinet has now requested supplementary questionnaires in the lengthy investigation. The European Commission began Apple's Irish tax probe in June 2014, and the Brussels-based executive body formally accused the iPhone maker of receiving illegal state aid from Ireland in September 2014. A decision was originally expected earlier this year, but the additional information requested will likely cause further delays. Apple's tax policies have been scrutinized on numerous occasions over the past three years, as the company is said to utilize multiple subsidiary companies located in the Irish city of Cork to move money around without significant tax penalties. Apple continues to deny any wrongdoing, and Ireland vows to take the European Commission to court over any negative ruling, according to the report. Apple's Irish tax probe is part of a larger crackdown by the European Commission on possible corporate tax avoidance in EU countries. Earlier this month, the commission reportedly accused McDonald's of "benefiting from arrangements that allowed it to pay no tax on European royalties in Luxembourg," and Fiat and Starbucks were ordered in October to repay up to €30 million in back

European Commission 'Concerned' About Apple's Streaming Music Plans

European regulators are scrutinizing Apple's discussions with record labels for its much-rumored streaming music service, according to Financial Times. The report claims the European Commission has contacted several labels and digital music companies to request information about their agreements with Apple, although these actions do not guarantee it will launch a formal antitrust investigation. The report, citing people familiar with the matter, claims that the European Commission is "concerned" that Apple will use its size and influence to persuade the music groups to abandon free, ad-supported services such as Spotify. Apple has nearly 1 billion iTunes users, and the company could face hefty fines and be required to change its business practises if committed of wrongdoing. Apple is expected to launch a revamped streaming music service at WWDC in June, although it will reportedly not offer a free, ad-supported streaming option like Spotify and some other competitors offer. The service will reportedly be deeply integrated into iTunes on Mac and the stock Music app for iPhone, iPad and iPod touch, and apps will also be available for Apple TV and Android.