EU probes French gas giant Engie's Luxembourg tax deals

(Source: twitter.com)
On Monday, the European Union (EU) launched an in-depth probe into alleged sweetheart tax deals between French gas group Engie and Luxembourg, taking on a major European multinational after similar high-profile investigations into US giants.

"The Commission has concerns that several tax rulings issued by Luxembourg may have given GDF Suez (now Engie) an unfair advantage over other companies, in breach of EU state aid rules," the EU's executive arm said in a statement.

The probe comes days after the Commission angered Washington with a ruling that US tech icon Apple had received favourable tax terms that amounted to state aid and ordered it to repay 13 billion euros ($14.5 billion) in back-taxes in Ireland.

The probe into one of France's most important companies opens on the same day as a visit by the EU Competition Commissioner Margrethe Vestager to Washington, where she is to meet with top US officials amid continued complaints over her Apple decision.

"We will look carefully at tax rulings issued by Luxembourg to GDF Suez," Vestager said in the Commission statement.

"They seem to contradict national taxation rules and allow GDF Suez to pay less tax than other companies," she added.

The Commission said Luxembourg is suspected of having afforded Engie subsidiaries different tax treatments for similar types of transactions, lowering the company's overall tax exposure significantly.

"Luxembourg's tax authorities appear to treat the same financial transaction between companies of GDF Suez in an inconsistent way," the Commission said.

"This resulted in tax benefits which are not available to other companies subject to the same national taxation rules in Luxembourg," it added.

The tiny EU nation has been under intense scrutiny since the LuxLeaks revelations showed that current European Commission President Jean-Claude Juncker gave companies huge tax breaks while he was the Luxembourg prime minister.

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