UK wins fight against EU tax order, in setback for EU's Vestager
Adds background information throughout, court quote in paragraphs 5,6
By Foo Yun Chee
BRUSSELS, Sept 19 (Reuters) -Britain won on Thursday its fight against an EU order to recover millions of euros from the London Stock Exchange LSEG.L, broadcaster ITV ITV.L and other multinationals, in a setback to EU regulators' crackdown on certain tax schemes.
The European Commission's decision, which targeted what it said was an illegal exemption in a British tax scheme, was issued in 2019 prior to Britain's withdrawal from the 27-country bloc a year later.
The European Union competition enforcer said the UK's Controlled Foreign Company (CFC) rules aimed at attracting companies to set up headquarters in the country and discourage British companies from moving offshore, gave these firms an illegal advantage.
The Luxembourg-based Court of Justice of the European Union (CJEU) sided with Britain.
"The Commission and the General Court erred in law in finding that the rules applicable to CFCs constituted the appropriate reference framework for examining whether a selected advantage had been conferred," the court said in a statement.
"The Court recalls that the Commission ... is in principle required to accept the Member State’s interpretation of the relevant provisions of its national law, unless it is able to establish that another interpretation prevails in the case-law or the administrative practice of that Member State", it added.
The ruling is final and cannot be appealed.
EU antitrust chief Margrethe Vestager has made the tax crackdown a key plank of her job.
The Commission did not identify the companies which benefited from the scheme. However, BBA Aviation, Chemring CHG.L, Daily Mail & General, Diageo DGE.L, Euromoney, Inchcape INCH.L, Meggitt MGGT.L, Smith & Nephew SN.L and WPP WPP.L have mentioned the EU investigation in their accounts.
The CJEU last week upheld the Commission's record 13 billion euro tax order to Apple, marking its biggest victory.
The joined cases are C-555/22 P United Kingdom v Commission and Others, C-556/22 P ITV v Commission and Others and C-564/22 P LSEGH (Luxembourg) and London Stock Exchange Group Holdings (Italy) v Commission and Others.
Reporting by Yun Chee Foo, Editing by Charlotte Van Campenhout, Philippa Fletcher and Emelia Sithole-Matarise
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
