:00:10. > :00:12.This is Business Live from BBC News, with Sally Bundock and Alice Baxter.
:00:13. > :00:15.The tech giant Apple could face a multi-billion dollar tax bill
:00:16. > :00:16.following an investigation by the European Union.
:00:17. > :00:40.Live from London, that's our top story on Tuesday 30th August.
:00:41. > :00:43.The United States has already warned the EU over unfair tax treatment
:00:44. > :00:47.Could Brussels go one step further and take a bite out of Apple?
:00:48. > :01:15.Is today the day we wave goodbye to the UK's biggest tech company?
:01:16. > :01:17.Shareholders of the chip-designer ARM are expected to vote in favour
:01:18. > :01:26.And we will keep you up to speed with all the latest from the market.
:01:27. > :01:28.In London there was no trading In London there was no trading
:01:29. > :01:34.yesterday due to a bank holiday. And the battle against
:01:35. > :01:37.soaring rents in India - we'll be finding out
:01:38. > :01:39.about a new hotel which is promising to offer affordable accommodation
:01:40. > :01:41.at just 50 cents a night. And as the EU is set to rule
:01:42. > :01:44.on Apple's tax affairs, we want to know whether you think
:01:45. > :01:47.Europe needs a rethink Do businesses get a free ride
:01:48. > :01:51.or is Brussels being too hands-on? Get in touch, just use
:01:52. > :01:53.the hashtag #bbcbizlive. American tech giant Apple is facing
:01:54. > :01:56.a potential tax bill running After a three-year probe
:01:57. > :02:00.into the tech giant's tax arrangements with the Irish
:02:01. > :02:01.government the findings of a European Union investigation
:02:02. > :02:04.are expected to be released today. The Financial Times are reporting
:02:05. > :02:07.that Ireland has given US company "illegal aid" through a so-called
:02:08. > :02:19."sweet heart" deal. That deal meant that Apple would
:02:20. > :02:22.effectively pay just 2% or less in corporation tax if it
:02:23. > :02:24.based its operations in Cork The big benefit for Ireland
:02:25. > :02:32.is significant job creation However, under EU law,
:02:33. > :02:35.national tax authorities are not allowed to give tax benefits
:02:36. > :02:39.to selected companies - which the EU would consider to be
:02:40. > :02:41.illegal state aid. Apple may face a bill of as much
:02:42. > :02:46.as $19 billion if the Irish government is forced to recoup
:02:47. > :02:49.taxes from the company. However, some reports say
:02:50. > :02:52.the figure may not be much But it will be up to Irish
:02:53. > :02:57.authorities to calculate Apple and the Irish government
:02:58. > :03:02.are both likely to appeal With me is our business
:03:03. > :03:19.editor, Simon Jack. Good morning. We have been waiting
:03:20. > :03:24.for this, we are expected to get the outcome of their investigation
:03:25. > :03:31.today. It is squaring up to be quite tasty trade war because the US
:03:32. > :03:37.warned, don't get involved with this, if anyone is owed back taxes
:03:38. > :03:41.from Apple it is the US government. They said the European Union is
:03:42. > :03:45.getting too big for its boots, acting like a supranational tax
:03:46. > :03:51.authority, going round to the member countries and telling them how to
:03:52. > :03:56.organise their tax deals. They have said this is a sweetheart deal, it
:03:57. > :04:04.is through advantageous tax systems like this that people are tracked --
:04:05. > :04:10.We are expecting a figure of about We are expecting a figure of about
:04:11. > :04:14.$1 billion. It is actually up to the Irish government to pursue those
:04:15. > :04:25.funds and yet the Irish government is saying, we like this arrangement,
:04:26. > :04:31.it benefits us and Apple. Exactly, 5500 people work for Apple in
:04:32. > :04:36.Northern Ireland. By giving this tax deal, lots of companies want to go
:04:37. > :04:41.there. There are lots of other areas that will be looking into this as
:04:42. > :04:47.well. It is interesting because we will see a race to the bottom in
:04:48. > :04:53.terms of corporation tax rates. This deal has a tax rate of less than
:04:54. > :04:58.two. The UK says we have 15% corporation tax and would like to go
:04:59. > :05:04.lower. It is very divisive when countries offer much lower tax rate
:05:05. > :05:11.than in another. From the point of view of the Competition Commission,
:05:12. > :05:24.they have investigated Tarbox, Amazon, Facebook is said to be in
:05:25. > :05:33.its sights as well. -- Starbucks. I think the recovered about 13 million
:05:34. > :05:37.from Starbucks. -- 30 million. So this is the big one. There was a lot
:05:38. > :05:42.of talk about where they should be taxed and they live in the financial
:05:43. > :05:49.equivalent of outer space with this money, no one can get their hands on
:05:50. > :05:53.them and that is the danger. I met Tim Cook a short while ago, and he
:05:54. > :06:02.said if you took it home he would have to pay a tax rate of 35% on
:06:03. > :06:06.that. That is the backdrop, they are saying this is crazy. The money is
:06:07. > :06:10.sitting out there in the financial equivalent of outer space, never
:06:11. > :06:15.comes home because the tax rate is too high. If they were ever to do
:06:16. > :06:19.it, the shareholders would sue their chief executive for losing so much
:06:20. > :06:25.money. It is an interesting situation which will be returned to
:06:26. > :06:29.again and again but Apple is the test case. There is a lot more
:06:30. > :06:31.detail on our website and we will update you as soon as we hear the
:06:32. > :06:32.outcome of that investigation. Later today European regulators
:06:33. > :06:36.will spell out exactly how the continent's so-called net
:06:37. > :06:39.neutrality rules will work. Net neutrality is the idea that
:06:40. > :06:43.all pieces of data moving across the internet should be
:06:44. > :06:46.treated equally - regardless as to whether it's a web page,
:06:47. > :06:51.a movie or a video call. There are fears that changes
:06:52. > :06:53.to existing rules could favour major We'll have more on this
:06:54. > :06:58.later in the show. The remarkable performance
:06:59. > :07:03.of Japan's labour market continued in July, with the jobless rate
:07:04. > :07:06.falling to a two-decade low. The unemployment rate fell
:07:07. > :07:11.0.1% to 3% last month, and versus economists' expectations
:07:12. > :07:13.it would hold steady at 3.1%. This is the lowest
:07:14. > :07:21.reading since May 1995. Kim Dotcom, the German-born
:07:22. > :07:23.entrepreneur who faces extradition to the US over copyright
:07:24. > :07:25.infringement charges, has won his request to have his appeal
:07:26. > :07:28.hearings live streamed Mr Dotcom, who lives in New Zealand,
:07:29. > :07:35.had said the hearings Shares in Hershey have plunged
:07:36. > :07:42.about 12% after it rejected a $23 billion takeover offer
:07:43. > :07:44.by Mondelez International - the snacks giant which makes Oreo
:07:45. > :07:50.cookies and Cadbury chocolates. The tie-up would have created
:07:51. > :07:52.the world's biggest candy maker. But Mondelez says it's no longer
:07:53. > :07:59.pursuing the acquisition. Banks in China have seen
:08:00. > :08:02.their shares rise ahead of releasing Both ICBC and Bank of China
:08:03. > :08:24.are due to report earnings. These banks are huge, aren't they?
:08:25. > :08:32.Some of the biggest in the world? They are indeed, and their earnings
:08:33. > :08:36.are being closely watched. There are lots of concerns because things are
:08:37. > :08:41.slowing down, lots of major concerns about the banking system and high
:08:42. > :08:45.levels of bad debt. As of clay you have seen squeezed profit margins,
:08:46. > :08:51.mounting bad loans, all of this expected in the report. But shares
:08:52. > :08:55.are up for both these banks as investors seem to be shrugging off
:08:56. > :09:03.these concerns alongside warnings from credit rating agencies that the
:09:04. > :09:09.banking system in China faces a systemic risk. You also have things
:09:10. > :09:14.like overcapacity in some industries like mining and steel which made
:09:15. > :09:18.less investment is funded by debt less profitable and analysts have
:09:19. > :09:24.pointed to several indicators showing how Chinese firms' ability
:09:25. > :09:28.to pay debt is now also starting to deteriorate. Amongst the most
:09:29. > :09:32.troubled sectors, we are seeing real estate, manufacturing, steel as well
:09:33. > :09:37.as mining, so all of this means these earnings results will not be
:09:38. > :09:41.great. Nevertheless stocks are higher today with ICBC approaching
:09:42. > :09:50.its highest close since October last year, while Bank of China extended
:09:51. > :10:05.verse 2/7%. Let's have a look at the impact of that.
:10:06. > :10:20.Japan's Nikkei is flat. Here in London, the FTSE 100 was closed on
:10:21. > :10:29.Monday for a bank holiday. Today we can see it is open, just a verso
:10:30. > :10:37.slightly down. The US dollar backed off a two-day hike, still hovering
:10:38. > :10:39.under $50 per barrel. Elsewhere in Europe, markets modestly higher.
:10:40. > :10:42.Michelle has the details about what's ahead on Wall Street today.
:10:43. > :10:44.Wall Street will have a couple of economic
:10:45. > :10:45.reports to digest ahead of the
:10:46. > :10:49.Data due out later this Tuesday is likely to show consumers
:10:50. > :10:51.are feeling more anxious about their financial situation.
:10:52. > :10:53.US consumer confidence is expected to have
:10:54. > :11:01.Better news is anticipated from the housing market.
:11:02. > :11:05.Case Shillar releases its monthly 20 city housing price index and it's
:11:06. > :11:11.forecast to have risen 5.2% in the past 12 months to June.
:11:12. > :11:13.And on the corporate front, struggling teen
:11:14. > :11:15.clothing retailer, Abercromby and Fitch reports second quarter
:11:16. > :11:28.Investors will look for comments on the recovery at the
:11:29. > :11:30.brand and its performance so far in the third quarter.
:11:31. > :11:32.Now, the company has been investing heavily to
:11:33. > :11:35.remodel its Hollister stores and is working to try and turn
:11:36. > :11:43.With me is Simon French, chief economist for Panmure Gordon.
:11:44. > :11:51.Nice to see you. Michelle mentioned quite a lot going on in the States,
:11:52. > :11:57.but let's talk about arm Holdings, which is a big success story here in
:11:58. > :11:59.the UK, and it looks like their shareholders will approve its
:12:00. > :12:06.takeover by the Japanese company Softbank. It is a huge deal, and
:12:07. > :12:11.after the announcement of the takeover there was a premium of 43%
:12:12. > :12:21.of the trading value and that's where shares are trading this
:12:22. > :12:25.morning. Theresa May has revealed an industrial strategy from the
:12:26. > :12:32.Government will take a more critical eye at takeovers, the backdrop to
:12:33. > :12:38.this is Cadbury and Kraft and also the botched takeover of Pfizer and
:12:39. > :12:42.AstraZeneca seem not to be in the interests of the firms involved. The
:12:43. > :12:49.first real test was whether the Government would take a closer look
:12:50. > :12:54.at this. It seems it won't, it seems the investor confidence priority
:12:55. > :13:03.post-referendum vote has taken priority over industrial strategy
:13:04. > :13:11.and we expect that by Friday, Arm will delist from the FTSE 100. It is
:13:12. > :13:15.quite phenomenal really. It is, the huge story. Another big story this
:13:16. > :13:26.morning is where the negotiations between this free trade deal. We
:13:27. > :13:30.heard the German economy Minister saying he thinks negotiations will
:13:31. > :13:38.all but fail, over the weekend. Where are we? Officials have been
:13:39. > :13:43.negotiating this for about three years now, but actually I think as
:13:44. > :13:48.we enter into the electoral cycle, most obviously in the US in
:13:49. > :13:53.November, but also in French and German elections in 2017, the
:13:54. > :13:56.politicians are looking back at their electorates and saying there
:13:57. > :13:59.is no support for free trade arrangements. Most of the electorate
:14:00. > :14:05.look at arrangements that have been brokered over the last 20, 30 years,
:14:06. > :14:09.and don't see a material benefit for themselves so public support to try
:14:10. > :14:14.to have common standards and regulatory processes, certainly
:14:15. > :14:19.controversial in Europe where it is billed as a race to the bottom in
:14:20. > :14:24.terms of regulation, it means these things will certainly be parked as
:14:25. > :14:28.we get through the electoral cycle and arguably parked for good.
:14:29. > :14:30.Interesting given that we will be in the thick of that negotiating
:14:31. > :14:40.situation as well. Simon will return to look at the
:14:41. > :14:41.papers and about five minutes. Also still to come...
:14:42. > :14:43.Building affordable accommodation for low income workers.
:14:44. > :14:46.We'll be talking to one entrepreneur who's about to open a hotel
:14:47. > :14:53.You're with Business Live from BBC News
:14:54. > :14:55.Foreign companies invested a record amount into the UK
:14:56. > :15:00.The figures don't cover the period after the EU referendum,
:15:01. > :15:03.but the figures suggest the UK is once again the most
:15:04. > :15:08.attractive destination in the EU for foreign firms.
:15:09. > :15:15.Our economics correspondent Andrew Walker can tell us more.
:15:16. > :15:22.Andrew, walk us through these figures? One of the really striking
:15:23. > :15:28.ones is the suggestion that there are 116,000 jobs either created or
:15:29. > :15:34.protected as a result of investment from outside the UK. There is
:15:35. > :15:37.striking, and in particular the Department of International trade
:15:38. > :15:42.highlights Britain's status, it says, as the most popular
:15:43. > :15:48.destination in Europe for investment from emerging economies. We have
:15:49. > :15:54.some growth in investment from, they mention particularly, China, Hong
:15:55. > :15:56.Kong and India. One of the central planks in the campaign to leave the
:15:57. > :16:02.European Union was the idea that Britain could develop its economic
:16:03. > :16:06.relationship with countries outside of the great emerging economies
:16:07. > :16:10.outside the EU, like the three that I mentioned, more effectively. These
:16:11. > :16:15.figures don't cover the period since the referendum, but at the very
:16:16. > :16:26.least they suggest that any uncertainty created in advance of
:16:27. > :16:28.the vote does not seem to have had any effect on inward investment,
:16:29. > :16:29.certainly not as revealed by the Department of International Trade's
:16:30. > :16:34.new figures. It is interesting, because as we get
:16:35. > :16:40.more data coming in, it seems fairly positive? The bulk of it has been.
:16:41. > :16:47.The one major exception to that was the survey data, the purchasing
:16:48. > :16:52.index, which was what prompted the Bank of England into taking it very
:16:53. > :16:56.striking action, cutting interest rates and restarting quantitative
:16:57. > :17:01.easing. But a great deal of the data, particularly on consumer
:17:02. > :17:08.spending, has been relatively positive. It has certainly suggested
:17:09. > :17:11.no overwhelming short-term impact on the British economy. Many economists
:17:12. > :17:16.would say we need to look to the longer term to see just how business
:17:17. > :17:21.investment decisions respond over a longer period to the vote, and the
:17:22. > :17:25.uncertainty created by Britain's future relationship with the EU
:17:26. > :17:27.might have some impact, but much of what we have had so far has been
:17:28. > :17:30.positive. Our top story - the tech giant Apple
:17:31. > :17:35.could face a multi-billion dollar tax bill following an investigation
:17:36. > :17:38.by the European Union. After a three-year probe
:17:39. > :17:42.into the company's tax arrangements with the Irish government,
:17:43. > :17:44.the findings of a European Union investigation are expected
:17:45. > :17:57.to be released today. As soon as we hear, we will update
:17:58. > :18:06.you. Now let's get the inside track on the global problem of housing.
:18:07. > :18:07.Many people just can't afford housing.
:18:08. > :18:09.One young social entrepreneur has launched Chototel,
:18:10. > :18:11.a hotel start-up chain which seeks to provide the lowest paid
:18:12. > :18:13.workers with affordable and dignified accommodation.
:18:14. > :18:15.The first is opening next month in a densely populated industrial
:18:16. > :18:18.town about 70 miles south of Mumbai, with three others planned
:18:19. > :18:22.in the same town in the following four months.
:18:23. > :18:25.Each Chototel will offer clean, digitally connected and carefully
:18:26. > :18:35.The cheapest accommodation costs roughly 50 cents a night -
:18:36. > :18:38.around one tenth of the typical $5 a day received by the
:18:39. > :18:44.Chototel is planning to expand to the UK, UAE and Nigeria
:18:45. > :19:01.She's the founder of Chototel, a chain of super-budget hotels.
:19:02. > :19:15.Good morning, thank you for coming in. You are based in Mumbai. You are
:19:16. > :19:20.just 24, which is very young to be starting up a company, but you are a
:19:21. > :19:27.third generation entrepreneur all about social provision. Tell us
:19:28. > :19:31.more? When you start off a business you always ask yourself, what are
:19:32. > :19:35.your goals, are they clear enough to do? I think the most important
:19:36. > :19:41.question that we should ask ourselves is our these goals in spy
:19:42. > :19:45.business like this, it is very hard on the ground. Everything that can
:19:46. > :19:51.go wrong inevitably goes wrong. Unless you have those inspiring
:19:52. > :19:55.goals and that purpose in your vision, it does not give you the
:19:56. > :20:01.motivation to fight another day. What greater joy than two solve the
:20:02. > :20:06.most under Salt market segments, that is where we innovate from? We
:20:07. > :20:10.mentioned you are fairly young, but your great-uncle, your father, they
:20:11. > :20:14.have all been involved in this kind of thing in India, so you grew up in
:20:15. > :20:19.that environment? I would imagine they have helped you a lot? Most
:20:20. > :20:26.definitely. I have had more than 20 years of work. -- work experience.
:20:27. > :20:31.My uncle would come and discuss business at the dining table. Talk
:20:32. > :20:36.me through the business model, it is a wonderful social enterprise, but
:20:37. > :20:42.you have -- how have you created a hotel which so undercuts your
:20:43. > :20:47.competitors? It works similarly to house rentals, where we own the acid
:20:48. > :20:51.itself, which is appreciating in value, then you also benefit from
:20:52. > :20:57.the monthly or the daily rents that you get from the residents. It is a
:20:58. > :21:03.pretty hi-tech operation, talk me through how you work at someone's
:21:04. > :21:08.bill, utility bill, Internet bill at such a technology plays a very large
:21:09. > :21:13.part in why we can provide accommodation at $2 a night. We use
:21:14. > :21:18.technology to build quicker, to run the hotels in an unmanned way. Most
:21:19. > :21:22.importantly, we use financial technology to make sure money is
:21:23. > :21:27.moved real-time and information is available anywhere. So you can
:21:28. > :21:30.monitor usage of utilities like water and lighting, but they are
:21:31. > :21:37.paying you digitally, the whole thing is running smoothly from that
:21:38. > :21:40.point of view? If they are not paying you, they literally can't get
:21:41. > :21:45.in the door? They are locked out? You know, we do use technology, it
:21:46. > :21:52.is an important part of being able to scale the business. Unless
:21:53. > :21:56.technology is that every point, it is impossible to run a very large
:21:57. > :22:02.scale operation. You are planning to roll out the pilot in the by, then
:22:03. > :22:07.you have plans to expand into the UAE and the UK. That fantastic price
:22:08. > :22:13.point that we have talked about, how will that vary across these
:22:14. > :22:20.different territories? Over year, we can afford to pay a little more than
:22:21. > :22:28.$2 a night, but it is possible that around $5 in the UAE and about $8 in
:22:29. > :22:31.the UK. How do you vet the people staying, is it first-come,
:22:32. > :22:34.first-served? In your brief it says that if they were not staying in
:22:35. > :22:41.your hotel it is likely they would be sleeping in the streets? We are
:22:42. > :22:45.very firm believers of free markets, whether it is prices... The people
:22:46. > :22:49.coming in, it has to be market-driven. The minute we give a
:22:50. > :22:55.subsidy or accept one, our business is not scalable. The model is not
:22:56. > :23:01.replicable. It is very much driven by the market. The solution to that,
:23:02. > :23:07.which would be increasing the amount of supply available, but would keep
:23:08. > :23:10.the prices low. Thank you the coming in, Rhea Silva. Fascinating, we
:23:11. > :23:14.shall keep an eye on what Europe to Chototel, definitely.
:23:15. > :23:16.Let's see what other stories are being talked
:23:17. > :23:20.In a moment we'll take a look through the business pages,
:23:21. > :23:23.but first here's a quick reminder of how to get in touch with us.
:23:24. > :23:27.Website is how you can stay ahead. We will keep you up to date with the
:23:28. > :23:30.latest details, with insight and analysis from the BBC's team of
:23:31. > :23:34.editors around the world. We want to hear from you, get
:23:35. > :23:48.involved on the BBC business web page. You can find us on Twitter or
:23:49. > :23:56.Facebook. Business Live, on TV and online, whenever you need to know.
:23:57. > :24:00.Simon has returned. You have been getting in touch, Michelle Fleury
:24:01. > :24:05.has appealed to you, we have had some tweets about Apple.
:24:06. > :24:13.Our question is whether Apple should have to pay tax apples in Ireland?
:24:14. > :24:16.One person has said the company is literally richer than many
:24:17. > :24:20.countries, they should pay every penny.
:24:21. > :24:23.Another person says taxes should be collected where firms realise their
:24:24. > :24:29.value is added, the aggressive EU tax policy is getting out of its
:24:30. > :24:33.scope. It is interesting, Simon? Your thoughts? The corporation tax
:24:34. > :24:38.regime was designed in a period capital was not able to freely move
:24:39. > :24:45.across borders. It is wholly unfit for purpose. The OECD nanograms 20
:24:46. > :24:50.run top of this and looking at base erosion profit shifting, as one as
:24:51. > :24:53.your Tweet suggested, looking at where the profit is geographically
:24:54. > :24:57.generated and taxed in that location. That is hard given the
:24:58. > :25:04.technology systems available to the tax collecting bodies, but it is the
:25:05. > :25:08.direction of trouble. Simon Jack said earlier, this is
:25:09. > :25:11.retrospectively looking at quite aggressive Corporation Tax policies
:25:12. > :25:17.from Ireland. If somebody came to you and said we want to relocate due
:25:18. > :25:23.to Warsaw, we have a big offer, this is the financial the war sword charm
:25:24. > :25:31.offensive to woo London bankers. Would you pack your bags? Probably
:25:32. > :25:36.not. That is not a slight on Poland or Warsaw, but Warsaw is just one
:25:37. > :25:40.city trying to take advantage of the referendum vote, trying to get by
:25:41. > :25:46.this -- bankers and businesses to relocate. At -- Paris is another
:25:47. > :25:50.one. But I think it will fall on deaf ears, because we do not know
:25:51. > :25:55.which financial plus sporting will be available in the UK, post-Brexit.
:25:56. > :26:09.Thank you for coming in, and thank you for your company. Goodbye.
:26:10. > :26:14.Whilst we can look forward to another fine day with warm spells of
:26:15. > :26:19.such a coming through, you might have heard that out in the Atlantic
:26:20. > :26:23.there is Hurricanes Gaston Pereiro a category two hurricane, not far off
:26:24. > :26:24.being category