EU Widens Corporate Tax Investigation

The European Union is looking for evidence of sweetheart tax deals between EU countries and individual multinationals.
Katie Kuehner-HebertSeptember 17, 2015
EU Widens Corporate Tax Investigation

Now that all countries within the European Union are cooperating, regulators are widening their investigation into alleged sweetheart tax deals with companies, a Wall Street Journal article said Thursday.

EU Commissioner Margrethe Vestager told European lawmakers at a hearing on Thursday that all member countries were now cooperating with the Commission’s inquiries into a “large number” of tax agreements with individual companies to assess whether they breached EU law.

“This has allowed us to take the inquiries to a deeper level,” Vestager said.

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Tax rulings are used to confirm the size of companies’ future tax bills, but the EU has said it suspects some of the agreements may have granted certain firms an advantage over others, which would be illegal under EU law, according to the WSJ.

“We have asked each member state to provide us with 10 to 12 concrete tax rulings to give an idea of how tax rulings are used,” Vestager told lawmakers.

The EU said in June that it would ask 15 national governments to provide further details of “a substantial number of individual tax rulings,” after broadening its inquiry in December to all EU countries from an initial group of six. The investigation has sparked detailed probes into tax deals struck by four multinationals — Apple in Ireland, Amazon and Fiat in Luxembourg, and Starbucks in the Netherlands.

“At a time of austerity across much of the EU, governments are eager to crack down on tax avoidance to shore up their finances and demonstrate to taxpayers that wealthy multinationals are paying their fair share of taxes,” the WSJ wrote.

Vestager also told lawmakers on Thursday that she wouldn’t hesitate to open more detailed investigations if she found evidence that individual tax deals had violated EU law.