DHAKA: The European Commission is to open a formal investigation into Apple, Starbucks and Fiat in relation to tax arrangements with three EU countries.

The firms’ arrangements with Ireland, the Netherlands and Luxembourg will be investigated.

Announcing the move, tax commissioner Algirdas Semeta said that ‘fair tax competition is essential’, reports the BBC.

Last year, a US Senate investigation accused Ireland of giving special tax treatment to Apple.

The European Commission will look at whether the companies’ tax affairs breach EU rules on state aid.

Competition Commissioner Joaquin Almunia said, ‘In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes’.

Countries in Europe cannot allow certain firms to pay less tax than they should, Almunia added.

Apple said that it had not had ‘any special tax deal with the Irish government’.

BDST: 1633 HRS, JUNE 11, 2014