Apple, Starbucks, Amazon & others – Capital Allowances

Tax deals involving Apple, Starbucks and others are facing an EU probe over allegations they amounted to state aid worth billions of pounds.

The focus was firmly on national laws and corporate tax rules rather than the firms themselves.

Apple’s annual report showed how its Irish structures helped it achieve an effective tax rate of just 3.7% on its non-US income last year.

Senator Carl Levin, chairman of the sub-committee, said the Apple structure represented “the Holy Grail of tax avoidance”, however a Department of Finance spokesman said: “Ireland is confident that there is no state aid rule breach in this case and we will defend all aspects vigorously.”

The wider tax avoidance debate, which has included the likes of Starbucks, Amazon and Google, has focused on amending national laws to ensure fair payment worldwide.

Starbucks, whose tax arrangements in the Netherlands form part of the probe, has been among high profile firms facing criticism for its UK tax bill.

In October and December 2012, key executives were grilled by MPs about its multinational corporate (MNC) arrangements.

Revelations about royalty, licensing and transfer pricing structures used by MNCs to minimise UK tax burden became a focus for the Public Accounts Committee.

Capital Allowances


Arthur Kemp of Exact states “One legitimate and highly valuable tax relief that all UK property owning, tax paying companies can claim is Capital Allowances. This is a tax relief for qualifying assets within a Starbucks shop, Apple store, Amazon warehouse indeed any commercial building”.

“These allowances can be worth millions of pounds on a large development, and are taken directly off the yearly profit for these companies. The treasury are now encouraging more business to invest by increasing the Annual Investment Allowance (AIA) to £500,000 and with a WDA available above this amount”.



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