The European Union’s competition chief, Margrethe Vestager, has announced that the bloc’s regulators will likely launch investigations into tax deals between EU countries and multinationals.
This follows a review of the arrangements made in the previous decade. Vestager, who has previously ordered Apple and Amazon to pay billions of euros in back taxes, has stated that such tax deals amount to illegal tax breaks.
Despite her efforts to crack down on aggressive tax planning, Vestager warns that “it is still with us.”
Vestager presses on
Speaking at a conference in Copenhagen, she revealed that her services had conducted an extensive inquiry into tax ruling practices across all member states for the period 2014-2018, which is expected to lead to new investigations in certain countries. However, she did not name the countries or the companies involved.
Vestager has had a mixed record defending her decisions in court. The European Court of Justice is set to rule on her appeals in the coming months after a lower tribunal rejected her tax orders to Apple, Amazon, and Starbucks.
In her orders, Vestager wanted Apple to pay 13 billion euros in back taxes in Ireland and 250 million euros from Amazon to Luxembourg, among other cases that she said constituted illegal tax breaks.
There has been some change
Even though her orders were struck down, she did receive the court’s support for her order to Engie to pay back taxes of 120 million euros to Luxembourg.
Several EU countries have changed tax practices in response to Vestager’s tax crusade. Belgium, Ireland, Luxembourg, and the Netherlands have all taken steps to reform their tax systems.
As of now, it is unclear which countries and companies will be subject to new investigations. Nevertheless, Vestager’s announcement underscores the EU’s continued commitment to cracking down on illegal tax practices and ensuring that companies pay their fair share.