10th Apr 2020

EU 'orders' Estonia and Poland to disclose tax deals

  • Vestager issued an injunction against Estonia and Poland (Photo: Radikale Venstre)

Estonia and Poland have one month to give the European Commission data on sweetheart tax deals with big companies or face court action.

The EU’s competition regulator, Margrethe Vestager, on Monday (8 June) said it’s needed to ensure competition is not undercut by unfair tax rulings.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

National governments use rulings to attract corporations, but they may be illegal if they amount to state aid.

“We want to analyse them carefully to find out whether member states employ tax rulings to grant companies selective tax advantages that breach EU state aid rules,” said Vestager in a statement.

The commission is finding the task wrought with difficulties and has had to make multiple requests.

“Still, there are pieces missing. To have a complete overview we also need full information from Estonia and Poland,” Vestager noted.

Both were issued injunctions on Monday after failing to provide the documents initially requested last December.

They now have one month or risk facing a panel of judges at the European Court of Justice in Luxembourg.

Vestager also on Monday asked 15 member states - Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Lithuania, Portugal, Romania, Slovakia, Spain and Sweden - to hand over additional information on individual tax rulings.

The issue is sensitive following media revelations that Luxembourg let several multinationals pay almost no tax in Europe.

The affair - known as LuxLeaks - is an embarrassment to European Commission Jean-Claude Juncker, who led Luxembourg at the time.

Despite the injunctions, neither Estonia nor Poland is suspected of breaking EU laws.

But their refusal to hand over the requested documents has irked regulators.

“These two member states, unlike all the others, have not responded in full to the commission’s request and basically what has happened is that we are now ordering these member states to respond”, said Vestager’s spokesperson Ricardo Cardoso.

National law

The commission says Estonian and Polish arguments of fiscal secrecy are not good enough to impose the information blockade.

But Marika Post, who speaks on behalf of the Estonian government in Brussels, struck a defiant tone.

"We will carry out legal analyses once we have received the commission's letter and in particular will need to confirm the legal basis for sharing such information with the commission”, she said in an email.

Estonia sent the commission all the information requested except the data protected by the business and tax secrecy provisions, she said.

"It has to be stressed, that the Estonian legal framework does not allow beneficial treatment of businesses by tax rulings," she added.

Poland, for its part, was unable to comment.

“It looks like first we need to analyse the matter thoroughly before we allow comments,” said a spokesperson from Poland’s permanent representation in the EU in an email.

The commission last December requested all national governments provide information on the different tax ruling practices and for lists of different tax rulings.

Big companies in commission target scope

Last June, it opened separate probes into Apple in Ireland, Starbucks in The Netherlands and Fiat Finance & Trade in Luxembourg.

Another was opened against Amazon in Luxembourg in October. Earlier this year, it launched a fifth probe into a Belgian tax scheme.

All five are being investigated for receiving state aid.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

EU leaders struggling to break budget deadlock

Cuts to innovation, space, neighbourhood and other programme-spending push down the latest budget proposal on the table of EU leaders. Rebates could stay on, to win the support of the net-payers for a deal.

Unhappy EU leaders begin budget haggle

EU leaders arriving at the Brussels summit criticised the budget proposal of EU Council president Charles Michel, as richer member states insisted holding onto their rebates, while poorer countries wanted to avoid deep cuts to their subsidies.

News in Brief

  1. Migrants trapped on boat in Tripoli due to shelling
  2. EU anti-crisis budget 'could be up to €1.5 trillion'
  3. Western Balkan states appeal for EU help with masks
  4. Spain's lockdown could be extended until 10 May
  5. IMF: Pandemic crisis will be worse than great depression
  6. German economy minister expects progress on EU deal
  7. Italian PM: EU is at risk if no deal on recovery plan
  8. Belgian region to block EU Green Deal


ECB promises (almost) whatever it takes

The eurozone's central bank has promised to buy up to €750bn of government and private bonds in new pandemic counter-measures.


What does coronavirus 'Black Swan' mean for markets?

Falling demand and prices for oil and raw materials will revive the risk of deflation. The collapse in international trade and long-term rethinking of China's role as the major hub for the production of consumer goods and electronics is inevitable.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. How the EU's virus-alert agency failed
  2. Flemish nationalists torpedo Belgium Green Deal pledge
  3. Eurozone agreed €500bn cushion against virus blow
  4. Why Europe must act now, and on a big scale
  5. EU court blocks Poland's bid to 'frighten' judges
  6. Coronavirus sees approval-rating soar for EU leaders
  7. EU science chief who 'quit' had been told to resign
  8. EU delays 'exit strategies' plan, as WHO urges caution

Join EUobserver

Support quality EU news

Join us