Photographer: David Paul Morris/Bloomberg

EU Will Miss Apple Tax-Probe Deadline, Vestager Tells Lawmakers

Margrethe Vestager, the European Union’s competition chief, said regulators will miss a self-imposed deadline to complete tax probes into four companies, including Apple Inc., by the middle of this year.

“We will not sacrifice the rule of law or the quality of our work to speed up the process,” she told European Parliament lawmakers in Brussels on Tuesday.

The former Danish economy minister, who took up her EU role on Nov. 1, inherited the probes into Irish tax deals with Apple, Luxembourg’s taxation of Inc. and Fiat Finance & Trade as well as the Netherlands’ treatment of Starbucks Corp. All the companies have said that they acted within the law.

Apple last week raised a flag about the potential cost if the company is required to pay past taxes to Ireland as part of the European Commission investigation. While Apple hasn’t been able to estimate the amount, it could be “material,” the Cupertino, California-based technology company said in a filing with the U.S. Securities and Exchange Commission.

The probes comes amid a global clampdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits. The Brussels-based commission is in charge of policing state subsidies that skew EU competition and can request countries to claw back illegal aid.

Obtaining information is “time consuming” and regulators don’t always get the information they request the first or second time that they make a request, Vestager said. “But we will do our best. It is among our top priorities. Of course fast is always better than slow. But best of all is to be just.”

Big Mac Maker

Vestager said the commission is still examining whether regulators should also open a probe into McDonald’s Corp.’s arrangements in Luxembourg.

The Big Mac maker was accused by by trade unions of dodging more than 1 billion euros in taxes across Europe in another example of Luxembourg helping multinationals to slash their tax liabilities.

She also said she instructed officials to ensure that she gets replies from Poland, Estonia and Latvia after they failed to respond to an EU-wide request for information on corporate-tax deals late last year.

Vestager repeated that it’s still “way too early” to say whether Italy, Greece, Spain and Portugal violated state-aid rules with measures that allow banks to shore up their capital with tax credits.

The commission said last month it wrote to the countries to check whether EU rules were broken by the way deferred tax assets were converted into credits that sidestep planned capital rules.

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