Apple, McDonalds, Google And Ikea To Face EU Lawmakers

Over Tax Deals

BRUSSELS
Apple (AAPL.O), Google (GOOGL.O), McDonalds (MCD.N) and Ikea (IKEA.UL) will be
asked about their European tax deals on Wednesday as European Union lawmakers ratchet up
the pressure on multinationals to pay more tax on their profits locally.
The hearing, organized by the European Parliaments tax committee, follows a similar event
in November last year when Anheuser-Busch InBev (ABI.BR), HSBC (HSBA.L), Google and
eight other companies were quizzed on the same subject.
While the committee has no power to order changes, the hearing reflects the political concerns
over multinationals avoiding local tax liabilities.
The European Commission is also investigating several cases to see if they breach the blocs
state aid rules that prohibit EU countries from giving some companies an unfair advantage by
making special deals on tax.
Starbucks (SBUX.O) declined to take part because it has challenged a European Commission
order to the Dutch authorities to recover up to 30 million euros ($33 million) in back taxes,
the European Parliament said in a statement.
Fiat Chrysler Automobiles (FCHA.MI), which is also appealing an EU finding against its tax
deal with Luxembourg, also turned down the invitation.
The head of Inter Ikea Group, Soren Hansen, will argue the Swedish furniture retailers case.
Inter Ikea Group owns the intellectual property rights under which its retailers operate.
The Parliaments Green Party last month accused Ikea of avoided paying some 1 billion euros
($1.1 billion) in taxes from 2009 to 2014 because it channeled royalty income through a
Dutch company and possibly through Luxembourg and Liechtenstein.
All the companies have previously said they comply with EU tax rules.

EU Demands Starbucks, Fiat Pay Back Millions in Tax Breaks

BRUSSELS
The European Union is demanding that U.S. coffee chain Starbucks and carmaker Fiat repay
up to 30 million euros ($34 million) each in tax breaks they received from EU nations, in a
major ruling to cut down on sweet tax deals global multinationals often shop for.
EU antitrust Commissioner Margrethe Vestager said Wednesday that "all companies, big or
small, multinational or not, should pay their fair share of tax."

The European Commission polices state aid and antitrust laws and has been tightening
loopholes in EU legislation that have allowed individual EU countries to attract multinationals
with advantageous tax deals.
Vestager said the Netherlands will have to recoup the unpaid taxes from Starbucks and
Luxembourg from Fiat.
Starbucks said in an immediate reaction that it plans "to appeal since we followed the Dutch
and OECD rules," referring to the Organization for Economic Co-operation and Development
group of developed economies.
Fiat Chrysler also denied receiving any illegal state aid from Luxembourg and said a deal it
reached with Luxembourg was aimed only at clarifying pricing rules and "did not result in any
state aid."
Vestager maintained that both multinationals received "selective tax advantages" by which
companies are lured to specific nations with a promise they will pay fewer taxes than they
might pay elsewhere.
The Netherlands must now recoup between 20 million and 30 million euros ($23 million and
$34 million) from Starbucks and Luxembourg as much from Fiat. "This will remove the
unfair advantage they have enjoyed," Vestager said.
Fiat's taxes "would have been 20 times higher if calculations had been done at market
conditions," she added said.
She said the EU is investigating similar tax practices in all of the bloc's 28 nations.
"We do not stop here. We continue the enquiries into tax rulings," she said. "More cases may
come if we have indications that EU state aid rules are not being complied with."