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The European Commission is probing tax deals offered by several European countries, including Ireland, Luxembourg and the Netherlands, to multinational companies such as Apple and Starbucks, amid claims the states offered illegal concessions and “sweeteners” to firms, reports the Financial Times.
All three countries named by the newspaper have come in for criticism that they are acting as “tax havens” by allowing large international firms to base their headquarters there and route revenues through these countries to reduce their international tax bills.
The Commission’s decision does not signify that it has “identified wrongdoing” and is simply a request that these countries’ national governments “explain their system of tax rulings and give details of assurances given to several specific companies,” continues the newspaper. These findings will determine whether the Commission opens a formal investigation into these countries’ tax dealings. The paper continues –
The move threatens to open a new front in the global clampdown on tax evasion through enforcing the EU’s state aid rules – a unique regime that bans serious distortions of competition through tax breaks to favoured private groups. […] The rulings under scrutiny give assurances to companies – sometimes in advance of a decision to relocate – over how their tax affairs will be treated.
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