Formal EU State Aid investigation into certain tax rulings

Written by Axel Smits 12 June 2014


On June 11, 2014, the European Commission opened a formal State Aid investigation procedure into the transfer pricing arrangements and corporate taxation of certain companies in Ireland, the Netherlands and Luxembourg.

See this link for more information.

Wider inquiry into tax rulings

In parallel to these three formal investigations, the Commission will continue its wider inquiry into tax rulings, which covers more Member States, specifically with regard to intangible property regimes.

Impact

The EC has confirmed that tax rulings as such are not problematic. However, tax rulings may involve State Aid within the meaning of European Union (EU) rules if they are used to provide selective advantages to a specific company or group of companies. In such a case, any aid granted may be recovered from the beneficiaries with respect to the last ten years (plus interest), unless the aid can be qualified as ‘existing aid’ or if the Commission has raised legitimate expectations.

The opening of the formal investigation procedure allows the Member States’ authorities to further explain their practices and the Commission to gather further information from interested parties.

Click here for further information.

Click here for the EU Commission press release.

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