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European Commission Faces Setbacks in High-Profile Tax Avoidance Cases

 |  January 2, 2024

High-profile competition cases against tech giant Apple and coffee conglomerate Starbucks have spotlighted the European Commission’s ongoing battle to curb tax avoidance, raising awareness and political pressure despite facing legal setbacks, sources told Euronews.

The European Commission, spurred by the LuxLeaks revelations in 2013, initiated a decade-long campaign involving well-known brands like McDonald’s, Apple, and Ikea. The primary objective was to utilize tough competition powers to prevent companies from gaining unfair advantages through special deals with national tax authorities.

However, the recent set of court judgments has left the Commission’s efforts looking fragile as it enters the final year of its mandate. The Court of Justice’s rejection of the case involving Engie, the French energy supplier formerly known as GDF Suez, and its tax status in Luxembourg, has dealt a blow to the Commission’s strategy.

Notably, the legal setbacks have not only been external but have also included criticism from within the European Union. Even as the campaign drew support for its noble cause, it faced skepticism from the EU’s own courts. The rejection of Engie’s case marked a significant setback, questioning the effectiveness of the Commission’s approach.

Adding to the complexity, President Donald Trump, during his tenure, openly criticized the campaign. He accused Margrethe Vestager, the EU’s antitrust chief, of harboring anti-American sentiments, stating that she “really hates the USA.”

Vestager, who has been at the forefront of the tax avoidance crackdown, now faces challenges not only from external critics but also from within the EU itself. The recent favorable ruling for Amazon, which followed the Engie case, reinforced the e-commerce giant’s claim that it had consistently adhered to the law and had not received special treatment in Luxembourg.

Sources: Euro News