The European Commission has opened an in-depth investigation into Luxembourg’s tax treatment of the GDF Suez group (now Engie), it said September 19.
Advertisement
Luxembourg’s finance ministry said it “considers that no special tax treatment or selective advantage” has been awarded to any unit of Engie.
The Commission will investigate whether Luxembourg tax authorities “selectively derogated” from provisions of national tax law in tax rulings issued to GDF Suez by treating the same financial transaction between companies of GDF Suez inconsistently.
The probe into a company owned in part by the French state comes days after the Commission angered Washington by ruling that U.S. tech icon Apple had received favourable tax terms and ordered it to repay 13 billion euros ($14.5 billion) in back-taxes to Ireland.
“We will look carefully at tax rulings issued by Luxembourg to GDF Suez”, Vestager said in the Commission statement.
After carrying out a preliminary assessment, the Commission is of the view that these tax rulings gave GDF Suez “a considerable economic advantage not available to other companies subject to the same national tax rules”.
The Engie tax treatment probe comes after the commission in late August demanded that Ireland recoup roughly EUR13 billion ($14.5 billion) of unpaid taxes accumulated over more than a decade by Apple Inc., a move that intensified a feud between the European Union and USA over the bloc’s tax probes into American firms.
Engie also said it would cooperate with the probe.
The current president of the European Commission Jean-Claude Juncker was the Prime minister of the Grand Duchy at the time of the allegedly illegal tax rulings regarding the Engie case.
McDonald’s has defended its practices and said, “We pay the taxes that are owed and have not received any preferential treatment”.
In December past year the Commission ordered carmaker Fiat to pay back up to 30 million euros to Luxembourg.
Regarding the amount, the European Commissions’ spokesperson Ricardo Cardoso said in a news briefing on Monday that it is too early to say how much tax Engie may have to pay if it is found to have breached state aid rules.
The commissioner is set to meet the US Treasury Secretary Jack Lew this week amid fierce criticism over her recent decision to deliver Apple a € 13 billion fine over tax breaks in Ireland.
A Commission spokesman said it was a coincidence the investigation into Engie, a French company, was opened the same week.
Advertisement
GDF Suez, Engie since 2015, is a French electric utility company of which the French state owns about 33 percent.
