Apple's alleged favorable tax treatment by the Irish government will come under renewed scrutiny Tuesday, when the European Commission publishes its reasons for opening an in-depth investigation into the company's tax affairs.
Since June the Commission has been investigating whether Apple profited from state aid said to be worth billions of euros through favorable tax treatment from the Irish government. Both the company and the government deny any wrongdoing.
The Commission will publish its reasons for opening the investigation, and another involving auto maker Fiat, on Tuesday, Commission spokesman Antoine Colombani said in an email, declining to provide further details.
On Sunday, though, the Financial Times reported that Apple will be accused of striking illegal tax deals with the Irish government. The report, citing people involved in the case, said Apple profited for more than two decades from the deals, which could have netted it billions.
Colombani said the Commission will not publish any findings on Tuesday. In June, the Commission said in its preliminary analysis of the case that Apple could have received significant tax reductions from the Irish tax authorities.
Under European Union state aid rules, national authorities are not allowed to take measures allowing companies to pay less tax than they should. If the Commission were to find that Apple and the Irish government violated the state aid rules, Ireland could be required to recover the aid with interest from Apple.
Apple CFO Luca Maestri told the FT on Sunday that "there's never been any special deal, there's never been anything that would be construed as state aid." According to Maestri, Apple did speak with the Irish tax authorities but in doing so it was simply trying to understand what was the right amount of taxes it would have to pay in Ireland.
The Irish government did not immediately respond to a request for comment.
The probe into Apple's tax affairs is part of a wider crack-down on state aid provided by EU member states. The Commission has started similar investigations of two non-tech companies, looking into the taxes paid by Starbucks in the Netherlands, and by Fiat Finance and Trade in Luxembourg. New investigations into tax regimes in other states may be opened in the future.
After the Apple probe decision is published on the Commission's website, it will take a few weeks for it to be published in the Official Journal of the EU. From then, interested third parties will have one month to submit comments to the Commission, which will continue to investigate the case, Colombani said.
Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to [email protected]