UK and International Tax news
EC Extends Enquiry Into Member States Tax Rulings
Monday 15th June 2015
The European Commission has recently issued two injunctions ordering Estonia and Poland to deliver further information requested by the Commission on their tax rulings practice, and will also ask 15 other member states to provide a substantial number of individual tax rulings.
Since June 2013, the EC has been investigating the tax ruling practices of member states. It extended this information enquiry to all member states in December 2014. Letters requesting individual tax rulings have now been sent to Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Lithuania, Portugal, Romania, Slovakia, Spain and Sweden. Previously, the EC had requested individual tax rulings from Cyprus, Ireland, Luxembourg, Malta, the Netherlands and the UK. On the basis of information received, the EC has indicated that it does not propose asking Bulgaria, Croatia, Greece, Latvia and Slovenia for tax rulings.
In March 2014, the EC adopted two injunctions ordering Luxembourg to deliver information regarding tax rulings and intellectual property tax regimes and in December 2014, Luxembourg provided the missing information in full.
The EC has four ongoing in-depth investigations, in respect of concerns that tax rulings may give rise to state aid issues, relating to Apple in Ireland, Starbucks in The Netherlands, Fiat Finance & Trade and Amazon in Luxembourg. In February 2015, the EC also opened an investigation into a Belgian tax scheme, which allowed group companies to substantially reduce their corporation tax liability in Belgium on the basis of so-called “excess profit” tax rulings.
To date, Estonia and Poland have failed to adequately respond to the request for information, arguing fiscal secrecy and the principle of proportionality. They have only submitted general information but refused to provide a specific and detailed overview of tax rulings issued from 2010 to 2013.
The EC is however legally entitled to request any information it deems necessary for a state aid investigation, and member states are under a legal obligation to respond. Confidential fiscal information remains adequately protected, as the EC is itself bound by rules of confidentiality.
The EC has now issued two injunctions ordering Estonia and Poland to deliver within one month information previously requested. Should any of the two fail to deliver the missing information within one month, the EC may refer that member state to the EU Court of Justice.
If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.
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