02/09/2016 World Business Report

Ireland weighs up whether to fight Brussels over its Apple tax ruling?

Everyday items are getting the high tech treatment.

We report from Europe's biggest consumer technology show.

World leaders prepare for the G20 Summit in China where the tax row

between the US and Europe is rapidly climbing the agenda. We will start

there. We start in Ireland,

where Cabinet ministers meet shortly to decide their next move in the tax

row with Brussels over Apple. The European Commission has

of course ruled this week that Ireland's preferential tax

arrangements with the tech Let's just remind you

of the numbers here. The Commission says in 2014 Apple

paid the equivalent of this, It's demanding Apple pays 13 billino

euros in back taxes. But Ireland's leaders are split over

whether to take the windfall, and jeopardize relations with other

multinationals also based there, The affair has resonated

through the corporate world, because Apple is just one

of the huge companies attracting the attention of this lady: EU

Competition Commissioner Margrethe Starbucks, Fiat, BP and brewing

giant, AB Inbev, are among those ordered to pay tens of millions

of euros in back taxes after their deals

were ruled illegal. But those rulings could be dwarfed

by an EU investigation into Amazon's tax deal with Luxembourg,

dating back to 2003. It claims "most of Amazon's European

profits" came through a subsidiary there whose structure meant

it avoided paying tax. And there's a similar probe

into McDonald's and its channelling The Commission claims the fast-food

chain hasn't paid corporate taxes on franchisee royalties in Europe

and Russia since 2009. Meanwhile, Luxembourg denies giving

either firm special treatment. Amazon and McDonald's say

they believe they've been paying their European

taxes appropriately. And Apple boss Tim Cook

expressed his anger in an interview with Irish radio on Thursday,

calling the move "political." It is maddening. It is maddening, it

is disappointing, and it is clear that this comes from a political

place. It has no basis in fact or law. Unfortunately it is one of

those things we have to work through. When you are accused of

doing something that is so foreign to your values it brings out an

outrage in you. James Webber is a Partner at law

firm Shearman and Sterling. Good morning. Good morning. Tim Cook

is saying there is no legal basis for this ruling. Is he right? I

think there is a good chance he is right. The traditional test for the

relevant state aid is to say that the company's position is better

than a company in a similar situation, which would be another

multinational in Ireland. What the commission seems to have done here

is say Apple is not paying enough tax and doesn't touch on that

economic reality. There is a significant problem with it. It

might be a different test, but surely the whole point of an

independent executive arm is that it can use the law in novel ways to try

and protect the spirit of the law even if it does not necessarily mean

that things are following the letter or the normal course as you might

imagine in competition. Umm, that is clearly their position, they are

applying the rules and there is nothing extraordinary about it. It

has been there since the 50s, et cetera... I think that is a slight

exaggeration. It is quite clearly the case That states rules like that

would not apply in cases like this. The commission is trying something

new. When you try something new it is hard for companies to know what

the rules are. To know what the rules of the game now. That reduces

uncertainty and can be quite unfair. These rules were not in

contemplation when they made the arrangements, is what Apple is

saying. They made the deal with Ireland as a sovereign government

and there was no expectation a commission could come along and

second-guess the Irish determination. And in doing so it is

unfair and rules are being applied retroactively. That is clearly the

position from Apple. But briefly, we have the U.S. Treasury before any of

this came out saying that things like this from the European

Commission, they actually do more harm than good, effectively, and

they said it undermined some of the work being done around the world to

undermine tax loopholes. Do you agree? I think, again, there is a

good case for that. A lot of work is being done around the world to

improve the tax case for multinationals. Changing the rules

or even the way in which they are applied retroactively undermines the

cooperation they depend upon. OK. We will have to leave it there, James.

Thank you very much real-time. Thank you.

Let's stay with that issue of tax avoidance by multinational

companies, because the row is likely to continue at the G20 Summit

Rico Hizon is looking at this for us.

Rico, President Obama is going to wade into the debate?

Good morning. Good morning. President Obama will be joining?

Indeed. Washington says they will raise this issue during the G20

leaders summit because they saved the approach needs to be consistent

and globally co-ordinated, Victoria, rather than unilateral action by

individual countries. The Americans, though, do not expect a major

breakthrough because this issue is highly technical. Other topics

likely to be on the agenda of leaders, Victoria, are the slowdown

in the Chinese economy, territorial disputes, those in the south China

see, and it will likely push for far reaching measures for world economic

stimulus. The global leaders and it has a full plate in a Chinese city

of Hangjou. This will be Obama's last trip to Asia as president. And

you have Xi Jinping and Theresa May along those attending. This group

accounts for 85% of global GDP and two thirds of the population. Many

issues both economic and political will be discussed in this city. I

know you will be a cross all of them. Rico Hizon, thank you very

much. To Germany now where Europe's

biggest consumer technology show IFA gets under way in

Berlin later today. The big tech firms are pushing

their vision of the Smart Home, So, if you ever wanted to check

the contents of your fridge Our technology correspondent,

Rory Cellan-Jones, is there In Berlin this week, eight limbs of

the products that tech firms will soon be in your home. -- A glimpse.

The word smart is everywhere. This Chinese firm has even made it smart

to take a nap. This smart mattress will tell me how I slept, and it

says brilliant. Over at the giant Samsung stand, an old favourite, the

Internet connected fridge. What makes this different is that this

and other appliances are all controlled from a smartphone. There

are three cameras inside the fridge. Whenever the door closes it takes a

picture. You can add the expiry date so I know I have to eat a cake in

the next day. It is not just weird geeks thinking I need to eat a cake

in a day? These are real cases for real consumers and this will change

the behaviour of how we act with appliances. TVs continue to get

bigger with ever sharper pictures. Many this year based curved screens.

And Sony is looking further into the future with this projection system

turning any surface into a magical interactive space. Characters from

this book have left out of it magically onto the table. It is

Europe's biggest technology show. But one of the big names we have

seen so far, Samsung, Sony, where are the big European names taking a

bite out of this market? Mmm. To be fair, there are plenty of German

groups here, like this security camera that can distinguish between

homeowner and burglar. But overall it Europe is lagging behind. Ten

years ago, Nokia and other big names were dominating. Now they have all

gone and it is moving towards Samsung, Sony, Japan, Chinese

manufacturers, and obviously the big US web giants. They are here in

stealth. Be EU remains a big market for technology firms. And even

gadgets that are to play with your cat while you are way. Plenty of new

products are vying to make your home smarter. BBC News, Berlin.

The market. Trade is moving cautiously ahead of the US jobs

report that could open the door for an interest rate hike later in the

year. This is Asia, Europe opens in a couple couple of hours. See you