The European Commission has published the non-confidential version of its decision, announced on 20 June 2018, that two sets of tax rulings by the Luxembourg authorities in favour of companies in the Engie group (formerly GDF Suez) resulted in illegal state aid amounting to €120m.
The Commission began an in-depth investigation in September 2016 into two complex intra-group financing structures implemented by Engie in 2008 and 2010. It concluded that Luxembourg’s tax rulings on these arrangements did not reflect economic reality, but instead allowed an inconsistent treatment of the same transaction both as debt and as equity. This resulted in Engie receiving a selective economic advantage which enabled the group to avoid paying tax on around 99% of the profits generated by two Luxembourg subsidiaries.
The decision requires Luxembourg to recover the unlawful state aid from Engie LNG Holding Sarl (and from Engie Treasury Management Sarl to the extent that any amount of aid had materialised at the date of the decision). Any residual amounts are to be recovered from the French parent company, Engie SA.
The European Commission has published the non-confidential version of its decision, announced on 20 June 2018, that two sets of tax rulings by the Luxembourg authorities in favour of companies in the Engie group (formerly GDF Suez) resulted in illegal state aid amounting to €120m.
The Commission began an in-depth investigation in September 2016 into two complex intra-group financing structures implemented by Engie in 2008 and 2010. It concluded that Luxembourg’s tax rulings on these arrangements did not reflect economic reality, but instead allowed an inconsistent treatment of the same transaction both as debt and as equity. This resulted in Engie receiving a selective economic advantage which enabled the group to avoid paying tax on around 99% of the profits generated by two Luxembourg subsidiaries.
The decision requires Luxembourg to recover the unlawful state aid from Engie LNG Holding Sarl (and from Engie Treasury Management Sarl to the extent that any amount of aid had materialised at the date of the decision). Any residual amounts are to be recovered from the French parent company, Engie SA.
.tmb-editorspic.jpg?sfvrsn=df04ab27_1)
