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European Commission

Press release

Brussels, 24 March 2014

State aid: Commission orders Luxembourg to deliver information on tax practices

The European Commission has called on Luxembourg to submit information that the Commission needs in order to assess whether certain tax practices favour certain companies, in breach of EU state aid rules. As Luxembourg failed to adequately answer previous requests for information, the Commission has now adopted two information injunctions ordering Luxembourg to deliver the requested information within one month. Should Luxembourg persist in its refusal, the Commission may refer the issue to the EU Court of Justice.

The Commission is currently gathering information on both tax ruling practices (i.e. decisions for individual companies on specific tax matters) as well as intellectual property (IP) tax regimes in Member States, to assess their compliance with EU state aid rules. For this purpose, it sent information requests to several Member States, including Luxembourg. In both inquiries, Luxembourg refused to respond fully to the requests, invoking fiscal secrecy:

  • Regarding its tax ruling system Luxembourg only provided general information but failed to provide a specific overview of rulings it took in 2010, 2011 and 2012.

  • Luxembourg also refused to deliver certain information on the usage of the IP tax regime, including the details of the 100 largest companies falling under the regime.

However, the Commission is entitled to request any information it deems necessary for a state aid investigation, and Member States are under a duty to respond. Confidential fiscal information remains adequately protected, as the Commission is itself bound by rules of confidentiality.

To be able to treat all Member States equally, the Commission needs a full picture and must therefore use all available means to enforce its requests for information.


Tax rulings are comfort letters by the tax authorities addressed to an individual company on a specific tax matter. Tax rulings are not per se problematic under EU state aid rules, but only if provide selective advantages to specific companies or groups of companies.

Over the last ten years, several Member States have also introduced special tax regimes for IP rights that are supposed to stimulate innovation and investments in new technologies. Such regimes include "patent boxes", which provide for tax reductions on income from patents. In 2008, the Commission reviewed such a regime in Spain and concluded that the scheme did not constitute aid (see IP/08/216). Since then, however, the Commission has received indications that special tax regimes seem to mainly benefit highly mobile businesses and do not trigger significant additional research and development activity. The Commission is therefore gathering information to assess whether the regimes grant a selective advantage to a particular group of companies, in breach of EU state aid rules.

The Luxembourg regime was introduced in 2008 and allows for tax exemption of 80% of profits derived from the use or licencing of IP rights such as patents, trademarks, designs, models, internet domain names and software copyrights.

Procedural background

The state aid Procedural Regulation entitles the Commission to request any information it deems necessary to assess for a state aid investigation, i.e. including information to assess whether a Member State's tax practice favours certain companies. According to the Commission's Communication on professional secrecy, Member States cannot invoke professional secrecy for refusing to provide information requested by the Commission.

Contacts :

Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )

Yizhou Ren (+32 2 299 48 89)

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