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EU may probe Irish corp tax next week

Thursday, June 05 17:36:07

The European Union may open a formal probe as soon as next week into tax breaks that Ireland and the Netherlands use to attract international companies, according to people familiar with the case.

The European Commission is scheduled to discuss the issue at a meeting June 11, said two people, who asked not to be identified because the matter is private. Luxembourg may also face a probe, one of the people said. EU antitrust regulators said in September they were seeking preliminary information on whether the tax deals constituted illegal state aid.

The possible EU investigation comes amid a global crackdown on tax-avoidance as governments struggle to increase revenue and reduce deficits. Lawmakers in the U.S., the U.K., France and Italy have scrutinised companies such as Microsoft Corp., Hewlett-Packard Co., Google Inc., Apple Inc. and Amazon.com Inc. The commission has said tax avoidance and evasion cost the E1 trillion a year.

Most forms of government support, including tax breaks, that enable companies to gain an unfair advantage over competitors is illegal under EU rules.

Antoine Colombani, a spokesman for EU Competition Commissioner Joaquin Almunia, declined to comment. Irish and Luxembourg finance ministry officials also declined to comment on the matter. The Dutch finance ministry wasn't available to comment.

After having been ordered in March by the commission to supply details of tax breaks for businesses, Luxembourg last month asked an EU court to overturn the regulator's demands.