Thursday 19 July 2018

French utility Engie hit with €120m EU state-aid tax bill

EU Competition Commissioner Margrethe Vestager
EU Competition Commissioner Margrethe Vestager

Stephanie Bodoni

French energy utility Engie faces a €120m tax bill after the EU said it benefited from an unfair fiscal arrangement with Luxembourg.

Concluding a state-aid probe into the tax affairs of Engie, the European Commission on Wednesday said Luxembourg selectively deviated from provisions of national law to help lower the tax bill for France's former natural-gas monopoly, then known as GDF Suez.

The probe is one of a string of cases by the EU, which has sought to crack down on member nations giving a select few companies a tax advantage over others. The tax breaks at issue in the case were implemented by Engie in 2008 and in 2010, and allowed the company to pay an effective corporate tax rate of 0.3pc on certain profits in Luxembourg for about a decade.

This is illegal, the EU's antitrust chief said.

The so-called tax rulings "endorsed two complex financing structures put in place by Engie that treat the same transaction in an inconsistent way, both as debt and as equity," EU Competition Commissioner Margrethe Vestager said in a statement. "This artificially reduced the company's tax burden."

It follows the Commission demand that Ireland recoup €13bn in back taxes from Apple.

Bloomberg

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