EC publishes working paper on State aid and tax rulings

In June 2016, the EC published a working paper on State aid and tax rulings.

The working paper provides a brief summary on the measures taken by the EC so far in respect of the tax ruling practice of Member States (MS), and tax planning strategies utilized by integrated corporate groups. In the working paper, the Commission’s Directorate-General for Competition (DG) points out that tax ruling practices differ significantly in quantitative terms. It also states that most MS follow the procedural guidance provided by the EU and the OECD for granting a transfer pricing ruling and, therefore, the focus of the DG should be on cases where there is a manifest breach of the arm’s length principle.

State aid control in tax rulings follows from the Commission’s competence in the field of State aid as set out in the EU Treaties to investigate cases under State aid rules with the objective to prevent distortions of competition through the granting of special tax advantages that are not available to all similarly situated taxpayers in a given MS.

The working paper can be found by clicking on the following link http://ec.europa.eu/competition/state_aid/legislation/working_paper_tax_rulings.pdf

For further information please contact the firm’s tax partners Stephen Balzan on [email protected] or Elaine Camilleri on [email protected].

 

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