By Tom Fairless
BRUSSELS--European Union regulators delayed decisions on whether
four multinational companies including Apple Inc. and Amazon.com
Inc. may have benefited from illegal tax sweeteners, citing
difficulties in obtaining information to make its case.
In a hearing at the European Parliament, the EU's antitrust
chief Margrethe Vestager told lawmakers on Tuesday that her agency
"won't meet the deadline we set ourselves [of] the end of the
second quarter." She declined to give a new deadline.
The EU has opened a series of high-profile probes in recent
months into tax deals struck by four multinationals--Apple in
Ireland, Amazon and Fiat SpA in Luxembourg and Starbucks Corp. in
the Netherlands. Regulators had pledged to decide by the end of
June whether the deals violated EU law--decisions that could be
followed by demands for sizable back-tax payments.
All the companies and governments involved have denied breaching
EU rules.
The European Commission, the bloc's executive arm, has said the
investigations are a priority, despite concerns about a large
number of tax rulings benefiting companies while Jean-Claude
Juncker, now the commission president, was prime minister of
Luxembourg. At a time of austerity in many countries, governments
across the continent are seeking to shore up their finances and
demonstrate to taxpayers that wealthy multinationals are paying
their fair share of tax.
Ms. Vestager attributed the delay to difficulties in obtaining
information from the countries involved. "It has become clear that
obtaining info is challenging and time consuming," she said.
Luxembourg initially resisted the commission's requests for tax
documents and had been fighting the case in court, but the
country's prime minister, Xavier Bettel, relented in December after
the commission also asked other EU countries to share their tax
rulings.
"Obviously fast is better than slow, but better than all is
being just," Ms. Vestager said.
Regulators are also examining concerns from trade unions over
Luxembourg's tax dealings with McDonald's Corp., she said. "We are
looking into the information. to assess if there is a case," she
said.
The EU said in December that it would ask all 28 EU governments
to provide a full list of companies that received an advance tax
ruling between 2010 and 2013. It had previously requested an
overview of tax rulings provided by Cyprus, Ireland, Luxembourg,
Malta, the Netherlands and the U.K., as well as specific tax
rulings in Belgium.
Tax rulings are used to confirm the size of companies' future
tax bills, but the commission suspects some may have granted
certain companies an advantage over others, which would be illegal
under EU law.
Ms. Vestager said three national governments--the Czech
Republic, Estonia and Poland--hadn't yet provided the information
sought by her agency.
Brussels cannot impose tax policy on the bloc's 28 governments,
but regulators are using an EU-wide ban on selective state aid to
companies to crack down on individual tax deals that they deem to
have given an unfair advantage to certain enterprises.
Ms. Vestager said she wouldn't hesitate to open further
investigations if she suspected that the bloc's rules were being
violated. "We cannot do every case in the world but we can find
cases that we think [are] deeply problematic," she said.
She said she was aware of possible reputational damage for the
companies involved and would therefore seek to close the
investigations swiftly. But she stressed that she wouldn't
"sacrifice quality and justice."
The aim of the investigations, Ms. Vestager added, is to set a
precedent that would "inspire" national governments to change
legislation to ensure their tax systems are in line with EU rules.
That has already happened in Ireland, where the government has
announced it would phase out the controversial double-Irish tax
loophole, she said.
Write to Tom Fairless at tom.fairless@wsj.com
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