Apple and Google face off against the EU

Europe with flags - Wikimedia CommonsApple, Google, McDonald’s and IKEA are being hauled before the European Commission to explain their dodgy but legal tax deals.

EU lawmakers are expected to twist a few thumbscrews on multinationals to pay more tax on their profits locally.

The hearing, organized by the European Parliament’s tax committee, follows a similar event in November last year when Anheuser-Busch InBev, HSBC, Google and eight other companies were quizzed on the same subject.

While the committee has no power to order changes but the hearing reflects the political concerns over multinationals avoiding local tax liabilities and might call for EU action.

The European Commission is also investigating several cases to see if they breach the bloc’s state aid rules which prohibit EU countries from giving some companies an unfair advantage by making special deals on tax.

Attendence is optional Starbucks has already said it will not take part because it has challenged a European Commission order to the Dutch authorities to recover up to 30 million euros in back taxes, the European Parliament said in a statement.

Fiat Chrysler Automobiles is also appealing against an EU finding against its tax deal with Luxembourg, also turned down the invitation.

The head of the flat pack furniture outfit IKEA, Soren Hansen, will argue the Swedish furniture retailer’s case. Inter IKEA Group owns the intellectual property rights under which its retailers operate.

The Parliament’s Green party last month accused IKEA of avoided paying some 1 billion euros in taxes from 2009 to 2014 because it channeled royalty income through a Dutch company and possibly through Luxembourg and Liechtenstein.

All the companies have previously said they comply with EU tax rules. So if there is a problem the EU will have to change the rules.