The European Commission has upgraded the Task Force Tax Planning Practices into a new Unit within the Directorate General Competition, the deputy Director General for State aid Gert-Jan Koopman confirmed for Bloomberg. European Commission’s Task Force led by Max Lienemeyer is responsible for the State aid investigations into tax rulings and aggressive tax planning practices that might be in contravention to European Union law. The Commission has to date adopted decisions for recovery of tax in the cases of Apple (Ireland), Starbucks (The Netherlands), Fiat Finance (Luxembourg) and the Belgian Excess Profit ruling scheme. These decisions are under appeal at the Court of Justice of the European Union as final arbiter on the legality of European Commission’s decisions, which does not however prevent recovery of the assessed tax. Cases in the pipeline include Amazon, McDonald’s, and the most recent one – Engie (GDF Suez).
Gert-Jan Koopman speaking in Paris confirmed that the Task Force Tax Planning Practices set up in 2013 is now a permanent Unit within the Directorate General for Competition. Koopman also held that the team of case-handlers is being assisted by a second Unit on fiscal State aid, which is also looking into the tax cases from a State aid perspective. The deputy Director General said that the European Union investigations into multinational companies’ tax planning arrangements have been a reason for ‘rude awakening’ for tax and transfer-pricing specialists. Koopman also pointed out that the European Commission has since provided guidance to governments and companies as to the State aid compliance of the transfer-pricing arrangements and tax rulings in general.
The European Commission published in June 2016 a Working Paper on the applicability of Article 107(1) of the Treaty on the Functioning of the European Union to tax ruling practices. Specifically, the paper provides for clarification as to the applicability of the ‘arm’s length principle’ to tax rulings from a State aid perspective.