EY Law acts on appeal to the EU’s General Court of a European Commission decision concerning alleged State aid. The European Commission concludes in its decision (SA.44896) that part of a UK tax scheme gave illegal tax advantages to certain multinational companies.
As Commissioner Margrethe Vestager, in charge of competition policy, said: “Anti–tax avoidance rules are important to ensure that all companies pay their fair share of tax. But they must apply equally to all taxpayers. The UK gave certain multinationals a selective advantage by granting them an unjustified exemption from UK anti–tax avoidance rules. This is illegal under EU State aid rules. The UK must now recover the undue tax benefits.”
In October 2017, the Commission opened an in-depth investigation to verify whether the Group Financing Exemption complied with EU State aid rules and reached its conclusions in April 2019.
As long as the UK is an EU Member State, it has all the rights and obligations of membership. In particular, EU competition law, including EU State aid rules, continue to apply in full to the United Kingdom until it is no longer a member of the EU.
Since June 2013, the Commission has been investigating individual tax rulings or under tax schemes of Member States under EU State aid rules. In October 2015, the Commission concluded that Luxembourg and the Netherlands had granted selective tax advantages to Fiat and Starbucks, respectively. In January 2016, the Commission concluded that selective tax advantages granted by Belgium to at least 35 multinationals, mainly from the EU, under its “excess profit” tax scheme are illegal under EU State aid rules. In August 2016, the Commission concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. In October 2017, the Commission concluded that Luxembourg granted undue tax benefits of up to €250 million to Amazon. The Commission also has two ongoing in-depth investigations into concerns that tax rulings may give rise to State aid issues in Luxembourg, as regards McDonald’s and GDF Suez (now Engie).
Several other applications appealing the EU Commission’s decision have been lodged at the General Court to date on behalf of various parties respectively represented by various counsel other than EY Law.