(Repeats to add reporting credit)
DUBLIN, June 10 The European Commission will
launch a formal investigation on Wednesday into Apple Inc's
tax arrangements in Ireland, Irish state broadcaster
RTE reported, without naming its source.
The EU's competition authority said last year that it was
looking into corporate tax arrangements in several member states
and had requested information from Ireland.
Antoine Colombani, a spokesman for competition issues at the
Commission, declined to comment on the RTE report. Ireland's
finance ministry said it had not been informed of any
Irish Prime Minister Enda Kenny declined to comment on
whether the Commission might be preparing to open an
investigation, but said he was confident in the legality of
Ireland's tax system.
"We believe that our legislation ... is very strong and
ethically implemented and we will defend that very robustly,"
Kenny told journalists in Dublin.
A U.S. Senate committee investigation revealed last year
that Apple had cut billions from its tax bill by declaring
companies registered in the Irish city of Cork as not tax
resident in any country.
Senator Carl Levin, chairman of the subcommittee and a
veteran tax sleuth, said the Apple structure represented "the
Holy Grail of tax avoidance".
Apple in the United States entered into deals with the Irish
subsidiaries whereby the Irish units received the rights to
certain intellectual property which were subsequently licensed
to other group companies, helping ensure almost no tax was
reported in countries like Britain or France.
Apple's Irish arrangement helped it achieve an effective tax
rate of just 3.7 percent on its non-U.S. income last year, its
annual report shows - a fraction of the prevailing rates in its
main overseas markets.
Apple did not return requests for comment on Tuesday. The
company has previously said it complied with the law.
Shares in Apple were essentially flat at 93.98 after the
news broke on Tuesday. Analysts say that the investigation is
unlikely to have a major impact on Apple's share price.
Piper Jaffray analyst Gene Munster said investors are
currently "hyper-focused" on new product speculation.
"I don't think it will be a problem unless Apple did
something illegal," said Munster.
(Reporting by Conor Humphries; Additional reporting by Barbara
Lewis in Brussels and Christina Farr in San Francisco; Editing
by Louise Heavens and David Evans)