The EU today announced a major probe into a British scheme protecting multinationals from tax avoidance rules, in the latest move in the bloc’s campaign to get international companies to pay their share. Europe’s competition chief Margrethe Vestager will investigate whether certain exemptions allowed under British rules amount to a breach of European Union regulations against state aid. The EU has waged a major crackdown on member states bending rules to give big international firms unfair tax breaks in recent years, with US tech giants such as Apple and Google in the firing line. “We will carefully look at an exemption to the UK’s anti-tax avoidance rules for certain transactions by multinationals, to make sure it does not breach EU State aid rules,” EU competition commissioner Vestager said in a statement. The announcement of the investigation comes as London and Brussels are mired in slow-moving negotiations over Britain’s departure from the EU in March 2019.
But the commission said that as long as Britain remains in the bloc, “it has all the rights and obligations of the membership”. “In particular, EU competition law, including EU State aid rules, continue to apply in full to the United Kingdom and in the United Kingdom until it is no longer a member of the EU,” the commission said in a statement. The scheme the commission will investigate centres around an exception to Britain’s “controlled foreign companies” rule, which was brought in to stop multinationals moving profits to offshore subsidiaries to avoid paying tax.