EU Believes Apple Tax Deals Broke Rules

European Union regulators laid out for the first time reasons why they believe tax deals granted to Apple in Ireland constituted illegal state support for the company -- the next stage of an investigation which could result in the companies paying huge sums in extra taxes to the governments concerned.

In a letter to the Irish government, the European Commission, the 28-member bloc's central antitrust authority, said it had reached the "preliminary view" that tax deals struck in Ireland in 1991 and 2007 in favor of Apple constituted state aid. "Through those rulings the Irish authorities confer an advantage on Apple" that is "granted in a selective manner," the commission wrote. At issue are the tax rulings, or so-called comfort letters, sent by governments to multinationals to give clarity on how a specific tax will be calculated. These would be illegal if they gave selective advantages to some companies.