On 11 June 2014, the European Commission announced the formal launch of three separate investigations into the transfer pricing arrangements of Apple, Starbucks, and Fiat Finance and Trade, with Ireland, the Netherlands and Luxembourg respectively.

The investigations come as a result of the Commission's review of EU Member State's compliance with state aid rules regarding aggressive tax planning of multinational companies. State aid is generally defined as any direct or indirect government expenditure which favors specific undertakings or economic sectors, including the granting of tax benefits which deviate from the standard regime.

The three investigations will focus on whether or not the companies received special tax treatment in the respective countries via tax rulings, which is in breach of EU state aid rules. The tax rulings in question were used to confirm the company's transfer pricing arrangements, and include:

• Ireland's tax ruling on the calculation of the taxable profit allocated to the Irish branches of Apple Sales International and of Apple Operations Europe
• The Netherland's tax ruling on the calculation of the taxable basis in the Netherlands for manufacturing activities of Starbucks Manufacturing EMEA BV
• Luxembourg's tax ruling on the calculation of the taxable basis in Luxembourg for the financing activities of Fiat Finance and Trade

The Commission's initial review of the calculations used to set the taxable basis in the tax rulings found that they would underestimate the companies taxable profits, thereby conferring a tax advantage and constituting state aid.

While the three investigations are ongoing, the Commission will continue its inquiry into non-compliant tax rulings of other EU Member States.