‘Further proof Brexit is right’ EU slammed over ‘pointless’ state aid probe into Britain

26 Oct

She added: “This is just another anti-Brexit attack on the UK from the Commission. Its latest investigation is yet further evidence that it is in the UK’s best interest to leave the union as soon as possible and to never look back.” 

Dan Neidle, a partner at the Clifford Chance law firm, told the FT: “To find its new rules subject to attack from another EU institution will probably strike HMRC as farcical.

“The UK is in the truly fantastic position of having rules which currently tax a Luxembourg treasury company at 4.7 per cent, but which I expect the ECJ would say shouldn’t tax that company at all, but which the commission is now asserting should be taxed at the full 19 per cent rate. This kind of thing makes Eurosceptics of the best of us.”

And Dominic Robertson, a tax lawyer at Slaughter and May, warned that many of Britain’s biggest multinational companies could find themselves facing a significant bill at the end of the process. 

He said: “This is potentially damaging for the companies that have used the rules — they are being told they may now have to pay back this benefit. People will obviously be worried about this.”

A tax investigation into the UK lasting several years could cost Brussels tens of millions of pounds, whilst HMRC would also face significant costs related to any order to claim back tax. 

EU officials have said it is too soon to speculate on which companies may have benefitted financially from the new arrangements. Any found to have done so will be ordered to pay all tax owed to HMRC. 

Commissioner Vestager said: “All companies must pay their fair share of tax. Anti-tax avoidance rules play an important role to achieve this goal. But rules targeting tax avoidance cannot go against their purpose and treat some companies better than others. 

“This is why we will carefully look at an exemption to the UK’s anti–tax avoidance rules for certain transactions by multinationals, to make sure it does not breach EU State aid rules.”

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