EC quizzes Ireland over multinational tax deals

The European Commission is believed to be asking Ireland, Luxembourg and the Netherlands to explain their position over their tax deals with multinationals such as Apple and Starbucks, in a move which could pave the way for a formal investigation into the use of preferential tax breaks as an inducement to investment.

The Commission's competition authority has asked the three jurisdictions to explain their system of tax rulings and give details of assurances given to several specific companies, according to the Financial Times.

The enquiries are believed to centre on whether such arrangements contravene the EU's state aid rules, which ban serious distortions of competition through tax breaks to favoured private groups.

According to the paper, the request for information is the start of an 'informal probe', with a Commission spokesperson saying: 'At the moment, we are simply gathering information on tax rulings.' However, there is the possibility that the questionnaire's findings could be used to start a formal investigation.

The Commission spokesperson said: 'The Hague, Dublin and Luxembourg have all been forced to combat claims that they are acting as tax havens, giving big corporations a base to reduce their tax bill worldwide. The rulings under scrutiny give assurances to companies - sometimes in advance of a decision to relocate - over how their tax affairs will be treated.'

A US Senate committee recently published a report which claimed Dublin allowed Apple to apply a corporation tax of 2% or less, although the Irish government strongly rejected allegations of any 'special deal'.

The Irish Ministry of Finance said it was not aware of a formal EU state aid inquiry but said it received queries from the Commission 'from time to time on a range of issues including tax.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

View profile and articles

Be the first to vote

Rate this article

Related Articles