Category: State Aid

The Fiat and Starbucks state aid tax cases: an absolute loss for legal certainty.

In late September, the EU General Court released its decisions in two long-awaited state aid appeals: Fiat (cases T-755/15 Luxembourg v Commission and T-759/15 Fiat Chrysler Finance Europe v Commission) and Starbucks (cases T-760/15 Netherlands v. Commission and T-636/16 Starbucks and Starbucks Manufacturing Emea v. Commission). ... - Continue reading

EU court backs use of arm’s length principle to assess Starbucks, Fiat APAs for state aid violation

The EU General Court today released long-awaited rulings in the Fiat and Starbucks tax state aid cases, concluding in both decisions that it is appropriate for the European Commission to assess whether an advance pricing agreement (APA) confers a selective advantage to a taxpayer for state aid purposes by referring to the arm’s length principle. ... - Continue reading

EU Commission to investigate 39 Belgium “excess profit” tax rulings for potential State aid violations

The European Commission today announced that it has opened 39 in-depth investigations to assess whether Belgian “excess profit” tax rulings granted to multinationals between 2005 and 2014 provided benefits that are contrary to EU State aid rules. ... - Continue reading

State aid: Commission approves the Maltese tonnage tax scheme subject to commitments

Commissioner Margrethe Vestager, in charge of competition policy, said “Tonnage tax systems are meant to promote the competitiveness of the EU shipping industry in a global market without unduly distorting competition. I am pleased that Malta committed to adapt its tonnage tax system to achieve this. Moreover, by encouraging the… – Continue reading

EUROPE INVESTIGATES IKEA TAX EVASION VIA NETHERLANDS

The European Commission is launching an investigation into Ikea’s tax construction in the Netherlands. European Commissioner on competition Margrethe Vestager is expected to officially announce the investigation on Tuesday, British newspaper the Financial Times reports. The Swedish furniture company is suspected of evading nearly a billion euros in taxes between… – Continue reading

EU to investigate UK tax loophole for multinationals

Inquiry to centre on George Osborne’s 2013 rule change that allows resident multinationals to shift income offshore The EU is to launch an investigation into a British government scheme that may help multinational firms pay less tax, the Guardian has learned. Margrethe Vestager, the EU competition commissioner, will announce on… – Continue reading

EU Takes Legal Action Against Portugal, Two Others on Tax Deals

The European Commission launched legal proceedings against Portugal, Bulgaria, and Cyprus for not adopting, in their national laws, European Union legislation requiring all EU countries to exchange tax rulings granted to multilateral companies. The legislation was adopted in the wake of the 2014 LuxLeaks scandal that revealed more than 100… – Continue reading

Cyprus: Abolition Of Profit Margins On Intra Group Loans – Upcoming Transfer Pricing Legislation – Transfer Pricing Studies Requirement

As a rule and according to Article 33 of the Cyprus Income Tax Law, which introduces the arm’s length principle (using wording similar to that of article 9 of the OECD Model Tax Convention), all transactions between companies, including loan agreements/transactions by Cyprus companies, must be undertaken at arm’s length… – Continue reading

Netherlands: Trends I Netherlands Moves Away From Fiscal Offshore Industry

The Netherlands is slowly but surely steering away from facilitating the use of its corporate income tax system by companies that are set up merely to obtain tax benefits. These companies, which often do not actually carry out activities in the Netherlands, have contributed to the perception among policy makers… – Continue reading

Apple files appeal against the EC’s $14 bn tax bill and accuses the commission of lack of diligence

Apple, which was recently slapped with a $14 bn tax bill for its activities in Ireland has now filed a 14-point appeal against the ruling. The EC had filed a case accusing Ireland of giving “state aid” to Apple. The European Commission (EC) charged Apple on various grounds, including tax… – Continue reading

If Apple won’t pay tax what hope is there for civilisation?

Multinationals owe responsibility to a wider group than their shareholders As the Apple tax case moves towards the European Union courts, €13 billion has been transferred to Ireland. The implications of the case will effect how multi-national companies implement taxes across Europe. has been accused of “bending the rules” in… – Continue reading

Juncker accused of blocking EU efforts against tax avoidance

Jean-Claude Juncker deliberately blocked the EU’s efforts to fight tax avoidance while in office as prime minister of Luxembourg, according to documents revealed by The Guardian and the International Consortium of Journalists. EurActiv France reports. Member states have supposedly spent the last two decades cooperating in the committee on business… – Continue reading

Ireland Rejects Oxfam’s Tax Haven Claims

Ireland’s Ministry of Finance, the EU and several other governments have emphatically rejected claims by Oxfam International that the countries are tax havens, with Ireland insisting its corporate tax laws are “fully compliant” with international best practices when it comes to transparency and information exchange. The Irish government said the… – Continue reading

Rate Competition Is New International Tax Planning Reality

Lower corporate tax rates around the world are expected to play an important part in multinational companies’ tax planning in 2017, with a rate as low as 15 percent on the table in the U.S. and countries such as the U.K. planning to maintain or lower their current rates. A… – Continue reading

McDonald’s to scrap Luxembourg tax structure

Fast-food chain’s reorganisation means £800m from restaurants in Europe will flow through the UK instead McDonald’s is to scrap its controversial Luxembourg tax structure in a corporate shakeup that means $1bn (£800m) of income from fast-food restaurants across Europe will flow through the UK instead. The move comes 12 months… – Continue reading

NETHERLANDS ACCUSED OF MAKING MORE SECRET TAX DEALS WITH GLOBAL BUSINESSES

The Netherlands is still making secret tax deals with multinational companies, according to an European report on which Dutch research foundation SOMO worked. The Netherlands remains one of the ost important countries in Europe when it comes to tax evasion, the report states according to ANP. Last year the Netherlands… – Continue reading

Common Base Could End EU Patent Box, Transfer Pricing Disputes

Adoption of legislation for a common consolidated corporate tax base by 27 EU member states would resolve current patent box conflicts and end transfer pricing disputes that cost multinational companies hundreds of millions of dollars in double taxation, according to EU and industry officials. Speaking at a Nov. 15 conference… – Continue reading

McDonald’s UK pays £123m in royalties to Luxembourg

The British arm of McDonald’s paid £123m for “franchise rights” last year, as part of a controversial structure that is under investigation for enabling unfair tax avoidance. The European Commission launched a probe last year into whether Luxembourg’s tax arrangements for McDonald’s amounted to illegal state aid, as part of… – Continue reading

Time for U.K. to Get Tough on Offshore Transparency?

With the exception of British Antarctica, the U.K.’s overseas territories and offshore dependencies are all surrounded by sun-winking ocean water. But that’s not their only common feature—they are all under increasing political pressure to become more transparent with their financial information. In a parliamentary report on tackling overseas corruption, the… – Continue reading

Tax havens are under attack

Ireland, accused of being a tax haven for multinationals such as Apple to pay nearly zero tax on the bulk of its profits earned outside the United States, finds itself with a new adversary in the global fight against unfair tax practices — Brazil. As of October 1, Brazil will… – Continue reading

European Parliament Begins Panama Papers Probe Despite Tax Haven Splits

Members of the European Parliament, September 27, have begun their investigation into the Panama Papers scandal, which exposed the sheer extent of rich people and companies using offshore tax havens to reduce their tax liabilities in EU member states. However, the latest probe comes on the back of another investigation… – Continue reading

OECD official says EU Apple ruling not precedent for future tax cases

A multi-billion euro back tax bill handed to Apple by the European Commission should not be seen as a precedent for future tax cases as it was based on state aid rather than tax law, the OECD official spearheading global tax reform said on Monday. European Union antitrust regulators last… – Continue reading

EU opens probe into tax deals between Luxembourg and Engie

European Union antitrust regulators opened a probe on Monday into tax deals granted by Luxembourg to French power utility Engie, stepping up the EU’s campaign against tax avoidance by multinationals. The European Commission said it had concerns the tax rulings granted by Luxembourg since 2008 appeared to treat the same… – Continue reading

OECD Pushes For More Certainty In International Tax Rules

OECD Secretary General Angel Gurría has stressed the need for policy makers to provide a certain tax environment for businesses, to maintain trade and investment. Discussing the tax challenges facing EU countries at the informal meeting of EU finance ministers, held in Bratislava, Slovakia, on September 10, 2016, Gurría said:… – Continue reading

Apple May Face Double Tax on Profits If France Adds to Tab

Apple Inc. may face double taxation on some of its profits if the European Commission’s Aug. 30 ruling inspires France to slap its own tax adjustment on the company, practitioners said. Apple could even face “triple taxation” if it repatriates profits from the European Union to the U.S., Laurent Leclercq,… – Continue reading

EU countries eye potential share of Apple windfall

Potential slice of the Apple pie stems from Commission’s invitation to EU tax authorities. BRATISLAVA — The €13 billion clawback of unpaid taxes from U.S. tech giant Apple has piqued the interests of EU finance ministers, who have today asked the European Commission for more details on the potential share… – Continue reading

Obama warns G20 of risk of tax ‘race to the bottom’

The G20 summit in China has stressed the need for international tax cooperation to achieve ‘a globally fair and modern international tax system’, after US President Obama warned of the risks if countries ‘race to the bottom’ in tax policies At a press conference at the conclusion of the summit,… – Continue reading

Businesses Fear Breakdown In BEPS Consensus

The International Chamber of Commerce (ICC) has expressed concern about the possible broader implications of the European Commission’s (EC’s) ruling against Apple. In a statement published on September 1, the ICC warned that unprecedented rulings of this nature fall outside the scope of the recommendations of the OECD’s base erosion… – Continue reading

Luxembourg may be focus of another Brussels tax inquiry

After state aid inquiries into Amazon and McDonald’s, EU looks again at Luxembourg The European Commission may open a fresh investigation into tax rulings offered by Luxembourg as early as this week, as EU competition commissioner Margrethe Vestager continues her clampdown against corporate tax avoidance. Luxembourg is already awaiting a… – Continue reading

Silicon Valley Issues Netherlands With Tax Warning

A coalition of Silicon Valley tech companies has urged the Dutch Government against making changes to the most “attractive” features of its corporate tax regime, warning that it risks damaging its traditionally strong tax competitiveness by doing so. The Silicon Valley Tax Directors Group (SVTDG), which includes more than 80… – Continue reading

Ireland risks being trampled in US/EU corporate tax fight

For the last three years, the international debate on tax policy was all about consensus. Led by the Organisation for Economic Co-operation and Development, countries across the globe agreed that aggressive tax planning by multinational corporations which pushed profits into low-tax countries – or indeed took profits outside the charge… – Continue reading

By singling out Apple over taxes, Brussels is abusing its own rules

Under EU rules it is illegal for countries to give financial help to some companies and not others in a way that distorts fair competition, writes Liza Lovdahl Gormsen. State aid rules were originally designed to protect the internal EU market and avoid retaliation among member states. The US Treasury,… – Continue reading

EU tax probes could threaten international agreements, US warns

The US has warned the EU that it risks damaging international agreements on tax reform if it continues to act as a “supra-national tax authority”. The US Treasury Department “shares the European Commission’s concern with tax avoidance by multinational firms. The international community, including the EU and its member states,… – Continue reading

Dublin and Washington enter talks to update Double Taxation treaty

Talks have begun between the US and Irish governments about updating certain elements of the Double Tax treaty between the two countries. The existing treaty was signed in 1997 and a Protocol to the treaty was signed in 1999. The Department of Finance and the Revenue Commissioners are calling for… – Continue reading

How Amazon Values Its Tech Assets for Tax Purposes

Regulators in Europe and the US say that the value Amazon places on the technology behind user experience varies radically depending on which appraisal will lower its tax bill. Jeff Bezos’s relentless focus on user experience has helped him make Amazon the most valuable e-commerce company in the world. But… – Continue reading

Brexit – The UK and International Tax Consequences

The political, economic and constitutional fallout of the UK’s referendum decision to leave the European Union (Brexit) will continue for some time. In addition to considering some of the possible domestic UK tax implications of Brexit, this OnPoint also considers some of the potential tax implications from the perspective of… – Continue reading

US Lawmakers Further Challenge EU’s Tax Ruling Probe

Members of the US Senate Committee on Finance have called on the US Secretary of the Treasury, Jack Lew, to continue aggressive engagement with the European Commission to ensure its ongoing tax ruling probe does not inappropriately target US multinationals. In their letter submitted to Lew on May 23, 2016,… – Continue reading

Exclusive: EU aims to rule on Amazon’s Luxembourg tax deal by July – sources

BRUSSELS – EU state aid regulators aim to rule on Amazon’s (AMZN.O) tax deal with Luxembourg by July, two people familiar with the matter said on Thursday, and it may order the country’s tax authorities to recover about 400 million euros ($448 million) in back taxes. The European Commission’s decision… – Continue reading

EU Lays Down the Law on Tax Deals as Apple Probe Continues

The European Union, locked in a tax battle with the likes of Apple Inc. and McDonald’s Corp., laid down the law in its bid to rein in governments that woo multinationals with special fiscal deals allowing them to reduce their fiscal liability by booking profits abroad. The European Commission, which… – Continue reading

Commission to extend state aid investigation into more transfer pricing agreements

The European Commission is looking into advance pricing agreements (APAs) given to financing companies and other businesses to see if they constitute illegal state aid, the MNE Tax news site has reported EU competition commissioner Margrethe Vestager told the European Parliament’s TAXE 2 committee that her office has reviewed 1,000… – Continue reading

International and Irish Tax Update – March 2016

Summary The pace of change in international tax is dramatic. Each month brings new initiatives and developments at both national and supra-national levels. In this update, we focus on recent changes which are relevant to our clients. The OECD Base Erosion and Profit Shifting (“BEPS”) reports were finalised in October… – Continue reading

Lawmakers Quiz Apple, Google, IKEA and McDonald’s Over Tax Avoidance

In their latest attempt to try to stamp out tax avoidance by multinationals in the European Union, lawmakers are set to question Apple, Google, IKEA and McDonald’s over their tax affairs as EU member states fail to agree a common tax policy. Lawmakers in the EU have struggled to prevent… – Continue reading

Tax tensions between the US and Europe hit new high

In the final session of the two day Global Tax Conference at Dublin Castle yesterday, a senior Canadian tax advisor used the analogy of children playing football to describe the relationship between multinationals and government when it comes to tax. In a kids football match, he said, when the ball… – Continue reading

Forget Panama, try Belgium for a cozy tax deal

The European Commission has concluded that selective tax advantages granted by Belgium under its ‘excess profit’ tax scheme are illegal under EU state aid rules. The European Commission is looking at Member States to assess compliance with EU state aid rules in the context of aggressive tax planning by multinationals,… – Continue reading

Revealed: how Project Goldcrest helped Amazon avoid huge sums in tax

Documents released during the internet giant’s court battle with the US Internal Revenue Service over a possible $1.5bn in unpaid taxes detail a complex restructuring and a deal with Luxembourg that delivered Amazon multimillion-dollar savings Amazon is facing a landmark court ruling in the US that could prise open its… – Continue reading

EU tax changes vs Singapore’s sovereignty

Last month the European Commission launched its Anti Tax Avoidance Package, propelled by unprecedented political support for the fight against perceived tax avoidance by multinationals. In it the European Union stresses its full support for recent recommendations of the Organisation for Economic Cooperation and Development’s (OECD) BEPS project and it… – Continue reading

European Union ‘investigating up to 300 Google-style tax deals’

As many as 300 “Google-style” tax deals are under investigation across the European Union , it has been claimed. All 28 EU states are said to be involved in scrutinising a number of agreements struck by countries and multi-national corporations as part of a wider inquiry into unfair tax competition… – Continue reading

Unions Blast Loopholes in New EU Tax Avoidance Proposals

A collective of unions has slammed the latest proposals by the European Commission to stamp out elaborate tax plans used by multinational companies to move vast profits around the EU in an effort to reduce their corporate tax bills in member states. The European Commission last week published a series… – Continue reading