The European Commission found on Tuesday 2 April that a UK tax scheme had exempted certain multinational companies from the application of UK rules targeting tax avoidance and called on London to recover this illegal state aid under EU law.
The purpose of the UK Controlled Foreign Company (CFC) rules is to combat tax evasion by domestic companies using a subsidiary established abroad. The Commission underlines that these rules are, in general, effective in combating tax avoidance.