On Tuesday 6 or Wednesday 7 September, the European Commission is expected to open formal investigations into tax rulings agreed between Luxembourg and an unnamed European company, according to reports in the Irish daily newspaper The Irish Times on Monday 5 September.
This will be the fourth formal investigation opened by the Commission into Luxembourg tax rulings. In October 2015, the European institution ordered the Grand Duchy to recover between €20 - 30 million from Fiat (see EUROPE 11415). It has also had an official look into the tax agreements granted to McDonald's (see EUROPE 11445) and Amazon (see EUROPE 11232), but no final decisions have as yet been announced on the last two of these.
Opening an investigation into a European company will also help to appease the United States, which had expressed concerns that its national businesses were being discriminated against in the investigations into State aid granted through the channel of taxation.
Over the weekend, the President of the European Commission, Jean-Claude Juncker, announced from the meeting of the G20 in China (see other article) that the decision made last week to order Ireland to recover €13 billion from Apple was not a decision "against the United States" (see EUROPE 11615). "Our rules on state aid have always been clear: national authorities cannot give tax benefits to some companies and not others. This is the level playing field that the Commission is always working to defend. We apply these rules without discrimination and without bias", he said, going on to describe the Apple decision as a landmark ruling.
Speaking publicly on this issue for the first time since the Commission's decision was announced, Pascal Saint-Amans, Director of the OECD's Centre for Tax Policy and Administration, nonetheless told Reuters that he did not think that the Apple case would serve as a precedent for the tax treatment of the profits made by multinational companies in the future. He went on to say that "this type of aggressive tax planning is outrageous and it's precisely because of this type of planning that we launched BEPS", the OECD's action plan to fight base erosion and profit-shifting, a number of recommendations of which have already been adopted into European law (see EUROPE 11407).
Furthermore, the finance ministers of the EU are to discuss the BEPS action plan and the notion of tax certainty at their informal meeting to be held in Bratislava on Friday 9 and Saturday 10 September. The Slovak Presidency of the Council of the EU, working closely with the OECD, has prepared a note on this subject. EUROPE will return to this. (Original version in French by Elodie Lamer)