BRUSSELS: Brussels has deepened its inquiry into Luxembourg’s tax treatment of Engie, the French utility, saying the country failed to provide “any possible justification” for a scheme that broke European law.
In preliminary findings against arrangements with Engie, the European Commission said internal transactions that enabled the company to cut its tax bill were a form of illegal state aid. The company faces the prospect of having to pay about €300m in back taxes to Luxembourg if the findings are upheld.
The commission on Thursday released the preliminary report from its investigation into Engie, formerly known as GDF Suez, saying it “has not been able to identify any possible ground for justifying the preferential treatment” that the company received.
The report shows that tax rulings from Luxembourg helped Engie to reduce its taxable base by up to €1.15bn between 2009 and 2015. That amount of money would be taxed at 29 per cent if the preliminary findings are upheld.
Brussels’ investigation of Engie is part of the commission’s clampdown on aggressive tax practices in global business, which last year led to a record demand that Apple repay €13bn plus interest in back taxes to Ireland. Other groups under scrutiny include Fiat, Amazon and McDonald’s in Luxembourg, Starbucks in the Netherlands and a number of companies in Belgium.
The Apple ruling enraged Washington but Margrethe Vestager, EU competition commissioner, denied that US groups were being unfairly targeted.
