The EU’s major tax-dodging cases

Brussels (dpa) – The European Commission found Wednesday that tax breaks Luxembourg had offered to the US fast food giant McDonald’s were not in breach of EU competition rules, following an in-depth investigation launched in 2015.

Below are the other high-profile cases in which the European Union’s competition watchdog has launched investigations or cracked down on member states for granting tax breaks to multinational companies.

Apple

The commission decided in August 2016 that Ireland’s tax benefits to US tech giant Apple were illegal under EU state aid rules because they allowed the company to pay substantially less in taxes than other businesses.
The EU called on Ireland to recover up to 13 billion euros (15.2 billion dollars) in back taxes by January 2017. In October, the commission decided to take Ireland to the European Court of Justice over its failure to recoup the money.
On Tuesday, the Irish government confirmed that Apple had paid 14.3 billion euros, including interest. The commission is now expected to withdraw its court action.
However, Ireland has challenged the commission before the European courts over its decision on Apple. The money is being held in an escrow account pending the outcome of the appeal.

Amazon

In October 2017, the commission found that Luxembourg had granted illegal tax benefits to the US online retail giant Amazon, ordering the grand duchy to recoup around 250 million euros in back taxes.
Under a special tax structure implemented between 2006 and 2014, most European profits of Amazon were recorded in Luxembourg, but not taxed there, the EU’s executive found.
In May, Luxembourg completed the recovery of more than 280 million euros, including interest, the commission announced Wednesday.

Belgian tax scheme

In January 2016, the commission ordered Belgium to recoup 700 million euros in unpaid taxed from at least 35 international companies.
The Belgian scheme allowed corporations to reduce their tax liability by deducting “excess profits” – accrued as a result of belonging to a multinational group – from their taxable profits.

British tax scheme

The commission announced in October 2017 that it was investigating a British scheme exempting multinational corporations from being taxed on certain transactions.
At the time, it expressed doubts about whether the so-called Group Financing Exemption was compliant with EU rules.

Engie

In June, the commission ordered French energy giant ENGIE to repay around 120 million euros of illegally granted tax benefits to Luxembourg.
The commission found that financial transactions between ENGIE’s Luxembourg subsidiaries were treated as both debt and equity, allowing the company to avoid paying taxes on 99 per cent of profits generated in the Grand Duchy.

Fiat

The commission decided in October 2015 that Luxembourg must collect between 20 million and 30 million euros from the financing arm of Italian carmaker Fiat.
The EU said the activities of the Luxembourg-based Fiat Finance and Trade were akin to a bank, but a tax ruling by the country allowed “an artificial and extremely complex methodology” to be used for calculating taxes.

Ikea

In December 2017, the commission launched an investigation into tax benefits granted by the Netherlands to furniture giant Ikea.
The investigation, still ongoing, focuses on two tax rulings by the Netherlands for Inter Ikea, one of the two groups that operate the Ikea business. The commission has concerns that the Dutch rulings have given Ikea an unfair advantage against other companies, in breach of EU competition rules.

Starbucks

In a decision in October 2015, the commission called on the Netherlands to recover 20 million to 30 million euros from US coffee retailer Starbucks. The commission said that a 2008 Dutch tax ruling gave a selective advantage by artificially lowering the company’s taxes.