On 19 September 2016 the European Commission (EC) announced that it has opened a formal state aid investigation into tax rulings granted by the Luxembourg tax authorities to GDF Suez group (now Engie). The investigation will look at the treatment of certain financing transactions between four Luxembourg group subsidiaries.
The investigation concerns the treatment of certain interest-free convertible loans issued by two Luxembourg group subsidiaries to two other Luxembourg companies of the group. The press release describes the reasons why the EC believes that the tax treatment applied to those transactions could represent State aid.
This decision (not yet published) represents only the preliminary assessment of the EC in this matter and confirms that the investigation does not call into question the general Luxembourg tax regime. Read more in this EU Direct Tax Newsalert.
If you would like to discuss the implications of the recent EC's investigations into taxation arrangements please contact Jonathan Hare or your usual PwC contact.
Not sure what State aid is and what may constitute unlawful state aid? Check out our introduction to State aid here.