EU Launches Investigation Into 'Aggressive Tax Planning' Of Apple, Starbucks
The investigation is in regards to the companies tax activities in Ireland, the Netherlands and Luxembourg, respectively.
"We need to fight against aggressive tax planning," said Joaquin Almunia, EU competition commissioner.
The commission has said that the tax avoidance tendencies of companies such as Apple, Hewlett-Packard (NYSE: HPQ) and Amazon.com (NASDAQ: AMZN) costs EU governments approximately one trillion euros or around US $1.4 trillion, annually.
Investigators are concerned that Apple, Starbucks and Fiat Finance have received an unfair advantage due to tax loopholes that allow the companies to underestimate their taxable income.
The commission said that these companies have received a "significant" reduction from the rulings of the respective national governments.
"Apple is subject to the same tax laws as scores of other international companies doing business in Ireland," the company commented in an email statement. "Apple pays every euro of every tax that we owe."
The Finance Ministry in Ireland has said it will defend all aspects of its dealings with Apple and is confident that there has been no breach of any state-aid rules.
Starbucks has also made a statement in which it defended its tax affairs, saying they comply with "all relevant tax rules."
Going forward, the EU commission said it plans to widen its investigation into rules of taxation.
The street doesn't seem to be too worried about this issue. However, both Starbucks and Apple are trading down slightly (under one percent) in Wednesday's pre-market.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.