Brussels, 11/07/2001 (Agence Europe) - Commissioner Monti, responsible for competition policy, announced on Wednesday that formal proceedings would be initiated against eleven corporate tax schemes in eight Member States (Germany, Spain, France, Ireland, Luxembourg, Netherlands, Finland and the United Kingdom). The Commission fears that the tax advantages enjoyed by these businesses could constitute State aid. Furthermore, it adopted "appropriate measures" against four other Member States (Belgium, Greece, Italy and Sweden) calling on them to do away with the tax advantages that are no longer justified, given the changes that have taken place within the single market. If Member States do not accept the Commission 's proposals, the latter will be forced to begin formal proceedings against them. Proceedings mainly focus on the tax advantages granted to multinationals or to companies active in the financial services sector or insurance sector. Six decisions concern coordination centres (the aim of which is to provide goods and services to affiliated businesses), three offshore companies, three other financial services and yet another three "inter-group regimes".
In 1997, the Ecofin Council had adopted a "Code of Conduct" in the field of direct taxation of companies in order to fight against harmful tax competition and to put an end to any unfair tax measure. The Commission had decided, on this occasion, to strictly apply rules relating to State aid, and had published in 1998 a communication on the application of such rules. Decisions taken on Wednesday are an example of the Commission's firm determination to "meet its institutional commitments", and come after a detailed investigation begun in February "at the request of the Member States", stressed Mario Monti, speaking to the press. Opting for the opening of several formal procedures, the Commission plans to clarify matters concerning certain tax advantages that are only enjoyed by multinationals or firms on the financial services sector. These advantages are not compatible with the European rules on State aid as they unduly relieve their receivers of part of the normal tax pressure. Even if these provisions are abolished or are about to be abolished, they have already been or will be used to the advantage of the receivers and must therefore, says the Commission, be examined.
Commissioner Monti welcomed the Member State initiatives aimed at putting an end to such measures while stressing the Commission's intention to continue in the way begun on Wednesday: "the current launch of investigations is the beginning of a longer-term exercise that will ensure that no tax measures in the EU are being used to support companies in a way that is incompatible with the single market", he said. He wished, however, to remove the ambiguity surrounding possible Commission intervention in an area that comes under the sovereignty of Member States. He said: "This exercise is by no means an interference with Member States' competence in tax matters. The Commission, as guardian of competition rules, must control State aid in the Community, whatever its form (grants, guarantees, preferential tax schemes, etc.)". We specify that the procedures initiated in no way prejudge the result but allow the Commission to gather information with a view to adopting a final decision that may be positive, negative, or positive subject to conditions.