ATTRACTING INVESTMENT BY GRANTING TAX BENEFITS IS ILLEGAL IN THE EU

The European Commission’s ruling that Apple should pay Ireland EUR 13 billion in taxes has reignited the discussion of how much tax large companies should pay. The members of the European Parliament are still demanding a transparent corporate taxation system and a better coordination among EU countries to ensure effective taxation where profits are generated.

One of the Parliament’s leading members on tax issues, Markus Ferber explained that large multinational companies are rightfully claiming that they are not breaking the rules, since they pay all taxes the national governments are asking for. This is the reason why the European Commission did not investigate the companies, but the states, i.e. the Netherlands, Luxembourg and Ireland. The European Commission and the European Parliament have now warned again the governments of the Member States to understand that attracting investments into their country by granting tax benefits is illegal under the EU rules.

The European Parliament has also set up two special committees on tax rulings to investigate certain EU countries that are using special tax regimes in order to favour large corporations.