No limit to fines in tax loophole probe, EU rules

The European Union will not limit how much it seeks to claw back from companies including Apple and Amazon that are ensnared in tax probes if controversial deals with national governments are overturned.

The financial health of firms under investigation would not warrant special treatment to avoid harming the economy — even if recovery amounts were in the billions of euros, said Gert-Jan Koopman, the European Commission’s deputy director-general for state aid.

“The odds and stakes for the companies concerned are massive,” Koopman said in an interview in Brussels.

“The concept of too big to fail in terms of recovery doesn’t exist.”

The EU is seeking to wrap up probes into separate tax deals struck by Apple, Amazon, Fiat Finance and Trade, and Starbucks in three EU countries. The inquiries come amid a global crackdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits.

Koopman stressed that no final decisions have been made in any of the cases. The EU also does not always ask national governments to recover benefits that are determined to be illegal aid.

At this stage, the commission is “not at all in a position to speculate” about the amount of any potential recovery, said Koopman.

In addition to the probes concerning Apple and Ireland, Starbucks and The Netherlands, and Amazon and Fiat Finance in Luxembourg, the commission is scrutinising tax deals throughout the EU that may have given companies unfair advantages.

The Department of Finance is “confident that there’s no case to answer in the Apple case”, spokesman Brendan Loughnane said.

* Bloomberg