EU Launches Investigation Into 'Aggressive Tax Planning,' of Apple and Starbucks

Regulators from the European Union said Wednesday that they have launched formal investigations into tax affairs of Apple, Inc.

, Starbucks

, and Fiat Finance. The investigation is in regard to the companies tax activities in Ireland, the Netherlands, and Luxembourg, respectively. "We need to fight against aggressive tax planning," said the EU competition commissioner, Joaquin Almunia. The commission has said that the tax avoidance tendencies of companies such as Apple, Hewlett-Packard Co.

, and Amazon.com Inc

costs EU governments approximately 1 trillion euros or around 1.4 trillion US dollars annually. Investigators are concerned that Apple, Starbucks, and Fiat Finance have received an unfair advantage due to tax loop-holes that allow them to under estimate 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 a emailed to 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 the pre-market.