EU regulators looking into corporate tax loopholes

European Union regulators are examining corporate tax loopholes across Europe that allow companies to cut their tax bills, to see if they are anti-competitive, the EU’s antitrust chief said on Tuesday.

European Competition Commissioner Joaquin Almunia’s comments come amid growing criticism of schemes used by Starbucks (SBUX.O), Apple (AAPL.O), Amazon (AMZN.O) and others operating within the law to minimise their taxes by shifting their profits into tax havens.

U.S. Internet companies have been especially effective at cutting their overseas tax bills, because weaknesses in European tax rules mean it can be hard for tax authorities there to claim the right to tax online sales revenues.

The Group of 20 leading economies has launched a drive to tackle profit shifting.

Almunia said he was concerned about such aggressive tax planning.

“In those cases where national laws or tax-administration decisions permit or encourage these practices, there might be a state aid component involved and I intend to go to the bottom of it,” he told a conference.

“This is why in the last few months we have been sending requests for information to some Member States where we have doubts about the consistency of some aspects of their legal framework or of their administrative practices,” he said.

As the antitrust enforcer in the 28-country European Union, Almunia can order governments to recover illegal aid granted to companies.

Almunia’s term officially ends in November, but Brussels insiders say the Spanish socialist may be sidetracked by extra duties when some of his European Commission colleagues step down in April to contest the European Parliament election. Source: Reuters.