EU probe into sweetheart tax deals to miss deadline

Brussels will fail to meet its self-imposed June deadline to close flagship investigations into sweetheart tax deals involving companies including Apple and Starbucks, the bloc's antitrust chief has admitted.

Margrethe Vestager, the EU's competition commissioner, blamed difficulties gathering information for the indefinite delay on the probes examining potentially illegal state support to multinationals.

Although the precise reason for the extension is unclear, her decision will be a relief to the countries and companies entangled in the probe, which Ms Vestager had made a priority when taking office last year, saying she wanted decisions in the cases by spring.

"We won't meet the deadline we set ourselves [of] the end of the second quarter," she told a hearing at the European parliament. She added the commission would not "sacrifice the rule of law or the quality of our work to speed up the process".

All the countries deny wrongdoing and question the commission's use of novel legal theories and allegations, claiming it attempts to interfere in sovereign tax policy through the backdoor. While tax policy is set by each member state in the EU, Brussels' investigations are a test of whether it can - through competition enforcement - curb selective tax deals that allegedly give certain multinationals an unfair advantage.

The commission last year launched four investigations into tax rulings, or comfort letters, where countries give multinationals assurances on their tax treatment. These include Ireland's arrangements with Apple, Holland's approval of Starbucks' tax base, and Luxembourg's clearance of structures used by Fiat and Amazon.

Under its mandate to police the provision of illegal state support to companies, the commission can order countries to recoup any illegal aid stretching back up to 10 years.

Earlier this month Apple addressed the potential consequences of the probe for the first time, warning investors that it could face "material" financial penalties stemming from the probe into its tax deals with Ireland.

EU state aid investigations are notorious for dragging on for years, partly because investigators are largely reliant on member states providing detailed information promptly.

Luxembourg initially refused to comply with certain Brussels information requests relating to tax rulings and took the matter to court. In December Xavier Bettel, Luxembourg's premier, agreed to share the information after the commission asked all EU member states to abide by a similar request.

"We will do our best. It is among our top priorities," Ms Vestager told MEPs, while admitting that gathering evidence was "time consuming". "Obviously fast is better than slow, but better than all is being just."

Asked about trade union objections to McDonald's tax dealings in Luxembourg, Ms Vestager said her staff were looking at the information and would be willing to open a probe if it was found to be warranted.

"We cannot do every case in the world but we can find cases that we think [are] deeply problematic," she said.

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