EU takes aim at UK tax perks

euobs

EU competition authorities have sunk their teeth into UK tax perks for multinationals amid a wider crackdown on aggressive tax avoidance.

The European Commission said on Thursday (26 October) it had opened an “in-depth investigation” into a British law that let big corporations shift profits to offshore subsidiaries. It said the opening of the probe did “not prejudge the outcome of the investigation”.

But it indicated that if the UK scheme constituted illegal state aid, then Britain could go the way of Ireland or Luxembourg in terms of EU injunctions. “We will carefully look at an exemption to the UK’s anti-tax avoidance rules for certain transactions by multinationals, to make sure it does not breach EU state aid rules,” the EU competition commissioner, Margrethe Vestager, said.

The Commission’s wider crackdown has seen US tech giant Apple ordered to pay back €13 billion in tax perks to Ireland and online retailer Amazon pay €250 million to Luxembourg.

It has also clawed back money in Belgium and the Netherlands in actions involving corporate giants Fiat, McDonalds, and Starbucks. The size of the UK ruling could be significant, with the British tax office, HM Revenue & Customs saying multinationals avoided paying €5.8 billion in taxes last year by booking profits overseas…

Read more : EUObserver, 26.10.2017