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Legality of tax loopholes to be investigated by the European Union

The head of the authority said today that certain Member States have been asked to provide further information on their tax affairs.

Joaquín Almunia, EU Commissioner for Competition, looking rather sparkly.
Joaquín Almunia, EU Commissioner for Competition, looking rather sparkly.
Image: Friends of Europe via Flickr/Creative Commmons

THE HEAD OF Competition Policy at the European Commission said he intends to fully investigate tax loopholes in several EU states.

Speaking today at the European Competition Forum, Joaquín Alumnia said there are ‘doubts about the consistency of some aspects of [the] legal framework or of administrative practices’ in certain Member States that allows companies to avoid paying their “proper share” of taxes.

“In those cases where national laws or tax-administration decisions permit or encourage these practices,” he said, “there might be a State aid component involved and I intend to go to the bottom of it.”

He said that over the past few month several EU states have been contacted to provide more information on such tax affairs.

Alumnia’s concerns stem from the possibility that these tax affairs are giving the companies in question an unfair advantage.

“Selective taxation is economically inefficient,” he said, “because it distorts the level playing field for the allocation of capital within the internal market.”

Read: Multinational companies paid just 2.2 per cent tax in 2011 >

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Nicky Ryan

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