Brussels, 13/12/2002 (Agence Europe) - At the end of an in-depth investigation, the European Commission considers that the special tax regime applicable to treasury pools in France does not meet the requirements of the EU framework for State aid. The procedure was opened in July 2000 and is part of a large-scale investigation with as goal to analyse several company tax schemes in twelve Member States. The scheme in question concerns tax deduction of interest expenses borne by a French subsidiary in connection with loans provided by its parent company. It only applies to parent companies and their subsidiaries operating with a multinational group of companies established in at least two foreign countries other than France, on condition that such subsidiaries have agreed with the tax authorities that they intend to operate under a special treasury pool agreement ((an intra-group agreement under which a French subsidiary centralises the financing activities of a multinational group and is thus entrusted to borrow funds from its parent company to finance the activities of the group). The Commission reached the conclusion that the French treasury pool scheme reduces the taxable earnings of the French subsidiaries that are part of the agreement. The result of this tax advantage is the risk of distortions to competition, especially in the case of risky international financing, which is subject to a high risk-premium. However, as at the time the scheme was introduced, both the French authorities and the beneficiaries could have believed that the scheme was not State aid, the Commission has decided not to call for the refund of any tax advantages received.