:00:00. > :00:00.are the latest headlines from BBC World News. Now for the latest
:00:00. > :00:18.financial news in World Business Report.
:00:19. > :00:25.A question of law: Is Apple's tax deal with Ireland illegal state aid?
:00:26. > :00:36.The European Commission will set out its case today. In contempt of
:00:37. > :00:38.court: A US judge says Argentina must pay its outstanding bond
:00:39. > :00:44.holders but the indebted nation argues the finding is absurd.
:00:45. > :00:49.Welcome to World Business Report. I'm Sally Bundock. Also in the
:00:50. > :00:52.programme, we'll go live to Hong Kong to gauge the impact the
:00:53. > :01:01.protests are having on businesses in the country. But first, The European
:01:02. > :01:04.Commission will publish a paper today that will accuse Apple of
:01:05. > :01:09.prospering from illegal tax deals with the Irish government. The
:01:10. > :01:13.report is part of a broader EU investigation into tax policies in
:01:14. > :01:16.Ireland, Netherlands and Luxembourg. The Commission is examining whether
:01:17. > :01:17.these countries have unfairly favoured multi`national companies
:01:18. > :01:20.including Apple, Fiat and Starbucks.The in`depth enquiry into
:01:21. > :01:22.Ireland will decide whether the country's benign tax regime means
:01:23. > :01:31.multinationals are, in fact, receiving a form of unfair state
:01:32. > :01:34.aid. If Brussels rules that Ireland's flexible approach to tax
:01:35. > :01:43.is illegal, Apple could face a fine that would extend into the billions.
:01:44. > :01:52.Apple says it has not had any special deals in Ireland. Thank you
:01:53. > :01:57.for being on the programme. Apple has been here before. It has had to
:01:58. > :02:02.justify its system of working through Ireland and having a very
:02:03. > :02:15.low tax threshold there are politicians in the United States.
:02:16. > :02:19.Why will this be any different? I do not think the allegations will be
:02:20. > :02:29.correct. There is very little detail what is in the report. It is true
:02:30. > :02:34.that Apple has two Irish companies and they are putting international
:02:35. > :02:37.revenue through these companies. 60% of the profit and revenue is
:02:38. > :02:44.flushing through the subsidiaries and they have no residence tax. The
:02:45. > :02:53.question is, why are multinational firms doing this? Many technology
:02:54. > :02:58.giants are doing the same in the US because the corporate tax in America
:02:59. > :03:07.is too high. Perhaps they should address that problem. That will mean
:03:08. > :03:13.that companies can come back into the US. They are not happy with how
:03:14. > :03:20.the system is running. The question that stands as, if the European
:03:21. > :03:25.commission are able to come up with these allegations and can back them
:03:26. > :03:34.up, what will happen with the Irish government? This is going to be
:03:35. > :03:41.dragged out in the European courts. They will say they have not given
:03:42. > :03:50.Apple any kind of special treatment. Then, the battle will
:03:51. > :03:56.start between the tax regulators and Apple itself. This is looking at
:03:57. > :04:01.Corporation tax across the board. There is no way that the American or
:04:02. > :04:07.British government could compete with a 2% tax deal being offered in
:04:08. > :04:15.Ireland. He cannot possibly imagine anyone would compete. `` you cannot.
:04:16. > :04:28.That is true. We are not sure. These are just rumours. They have got a
:04:29. > :04:36.huge base in Ireland. The company has been very intelligent. They
:04:37. > :04:44.formed a couple of companies in Ireland in 1980. If that is true or
:04:45. > :04:52.if there is a backdoor deal, or if there is a sweetener, we will have
:04:53. > :05:01.to find out. We will have to leave it there. It is a complicated legal
:05:02. > :05:08.story. Thank you very much. The story has got legs. We will touch on
:05:09. > :05:16.it in the near future. We will tell you more about this when it comes
:05:17. > :05:19.out. Let's discuss Argentina. A US judge has ruled Argentina is in
:05:20. > :05:23.contempt of court for refusing to obey an order to repay the debt it
:05:24. > :05:26.owes to two US hedge funds. The news adds another twist to this dispute
:05:27. > :05:29.between Argentina and the fund who bought the country's debt at a
:05:30. > :05:32.discount after its default in 2001. As creditors continue to argue the
:05:33. > :05:35.country must repay its outstanding debt in full, the Argentinean
:05:36. > :05:38.president has other ideas. So will either side back down? And what does
:05:39. > :05:48.this court ruling mean for Argentina? Victoria Fritz has this
:05:49. > :05:54.report from New York. The judge said that Bernard Saros acted illegally
:05:55. > :06:02.by avoiding paying the hedge funds. `` as well as arrows. This comes one
:06:03. > :06:08.day after the US ambassador to Argentina wrote to the Secretary of
:06:09. > :06:11.State and said this would be an unprecedented escalation in the
:06:12. > :06:17.conflict and would constitute interference in foreign affairs. Why
:06:18. > :06:21.are we here in the first place. There were two hedge funds switch
:06:22. > :06:27.held about $1.3 billion of Argentinian bonds. They were scooped
:06:28. > :06:30.up after the country defaulted in 2001. They have not taken part in
:06:31. > :06:39.restructuring. They want full repayment of the bonds. Argentina
:06:40. > :06:45.says this is impossible. They are refusing to pay them. They have
:06:46. > :06:52.called them vulture funds. There will be a new default. It started at
:06:53. > :06:56.the end of July. The judge has not applied penalties for the moment. It
:06:57. > :07:03.is not clear what practical implications there will be for the
:07:04. > :07:08.country. The country continues to defy the rulings of the judge. As
:07:09. > :07:10.the crowds continue to grow in the central business district of Hong
:07:11. > :07:14.Kong, so markets are falling as banks fail to open, ATMs run out of
:07:15. > :07:17.cash and businesses in the region remain closed.Later this week Hong
:07:18. > :07:20.Kong will celebrate a public holiday and there are now concerns retail
:07:21. > :07:32.sales will fall by more than 20% in the coming days.
:07:33. > :07:35.They will be a public holiday. After a 2% fall on Monday, the Hang Seng
:07:36. > :07:39.is down over 1% today. Joining me now is Gavin Parry from the Parry
:07:40. > :07:43.Global Group ` live from Hong Kong for us now. Thank you for being on
:07:44. > :07:49.the programme. How debilitating could this be for businesses in Hong
:07:50. > :07:56.Kong? It does not look like we'll be resolved quickly or easily. It will
:07:57. > :08:09.have an impact. It is a big retail sale period. We do not think that
:08:10. > :08:13.this will be a long situation. The Chief Executive made a statement
:08:14. > :08:27.this morning. This could last for a while. There are certain forces,
:08:28. > :08:30.economic, political, sociological, and the underlying aspect is that
:08:31. > :08:39.Hong Kong has always been the golden goose for China. There is a connect
:08:40. > :08:42.taking place. Hong Kong has always been and looks like it will always
:08:43. > :08:49.be the international gateway for China. The great fear for us was
:08:50. > :08:57.that they were going to be converted into an international board. We are
:08:58. > :09:05.in a position to become the international board for China. I do
:09:06. > :09:12.not see this as having a big impact. It could have a short`term economic
:09:13. > :09:20.impact. What are you advising clients based in Asia to do? There
:09:21. > :09:28.has already been pressure. The market has been affected heavily.
:09:29. > :09:34.The strong US dollar is an aspect. You have got to think about it on a
:09:35. > :09:39.historical basis. When this started, when the money was pumped
:09:40. > :09:44.into the economy, a large chunk of it was going to Hong Kong. It does
:09:45. > :09:58.not have to be checked by the Treasury. As the stimulus was
:09:59. > :10:06.growing, asset prices were growing. The tapering of the liquidity is
:10:07. > :10:15.coming. That is already happening. Thank you very much indeed, Gavin.
:10:16. > :10:19.Ford Motor has cut it pre tax profit forecast to $6 billion. Previously
:10:20. > :10:24.the car maker had been hoping to rack in $7 billion to $8 billion in
:10:25. > :10:34.2014. However, Ford expects pre`tax profits to rise in 2015 to between
:10:35. > :10:37.$8.5 billion and $9.5 billion. Japan's jobless rate shrank to 3.5%
:10:38. > :10:42.in August and the availability of jobs held steady at the highest in
:10:43. > :10:44.22 years. The seasonally adjusted employment rate fell from 3.8% in
:10:45. > :10:49.July reflecting recent improvement in Japan's labour market.
:10:50. > :11:00.That is all from the business for now. I will be back in a minute to
:11:01. > :11:07.review the newspapers. You are watching BBC News. Nearly
:11:08. > :11:08.one in eight `year`olds in the UK have tooth