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EU tax probe widens

Hardy GraupnerDecember 17, 2014

The EU Commission has said it will expand its investigation into dubious tax schemes for multinational companies to encompass all EU member states. It appears Luxembourg's practices aren't the only problem.

Starbucks in London
Image: picture alliance / Sven Simon

The EU executive said Wednesday it had widened its enquiry into tax ruling practices under the bloc's rules restricting state aid to corporations. The enquiry will now cover all 28 member states.

The announcement came as governments in many parts of the world were trying to crack down on corporate tax avoidance. The issue returned to the headlines in Europe with fresh allegations that Luxembourg had helped hundreds of corporations to avoid paying billions of euros in taxes in other European member states.

The European Commission launched formal investigations into tax schemes set up for Apple in Ireland, for Starbucks in the Netherlands and for Amazon and the financing arm of Fiat in Luxembourg.

Market distortions

The Commission's newly elected head, Jean-Claude Juncker, had in recent months come under fire over the Luxembourg tax deals, because he was the country's long-serving Prime Minister during the time when the relevant rulings were agreed.

We need a full picture of the tax rulings practices in the whole EU, to identify if and where competition in the single market is being distorted through selective tax advantages," EU Competition Commissioner Margrethe Vestager said in a statement.

Brussels said it was widening its probe to make sure a more level playing field is guaranteed for all companies in the future.

hg/nz (dpa, AFP)