A PYMNTS Company

EU: EC opens probe into tax deals between Luxembourg and Engie

 |  September 19, 2016

European Union antitrust regulators opened a probe on Monday into tax deals granted by Luxembourg to French power utility Engie, stepping up the EU’s campaign against tax avoidance by multinationals.

The European Commission said it had concerns the tax rulings granted by Luxembourg since 2008 appeared to treat the same financial transaction as both debt and equity, leading to double non-taxation of companies in the GDF Suez group, as Engie was formerly known.

That may have given GDF Suez an unfair advantage over other companies in breach of EU state aid rules, the Commission said.

“Financial transactions can be taxed differently depending on the type of transaction, equity or debt – but a single company cannot have the best of two worlds for one and the same transaction,” Margrethe Vestager, EU Competition Commissioner, said in a statement.

A spokeswoman for Engie said the company took note of the decision and would cooperate fully with the Commission to answer its questions.

Engie has been present in Luxembourg since 1933 and employs about 300 people, she said.

Luxembourg also said it would provide the Commission with all the necessary information. The government said it believed no particular fiscal treatment or selective advantage had been granted to the Engie companies.

Full Content: Reuters

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.