Since June 2013, the EC has been investigating the corporate tax ruling practices of a number of EU Member States under EU State aid law. These rulings are comfort letters issued to a company on a specific tax matter.

The concern is that some of these rulings provide a selective advantage to a company or group of companies that competitors do not have. In this situation, the ruling would give rise to illegal State aid, which might therefore have to be repaid with interest. The issue is therefore of relevance not just to companies which have or might benefit, but to competing enterprises as well.

In the most recent development in the investigation, on 8 June 2015, the EC ordered Estonia and Poland to deliver general information on their tax rulings and requested individual company tax ruling information from a further 15 Member States. This means only five of the EU Member States are not currently being investigated in one way or another.

This further development shows that the EC continues to expand its tax State aid investigations. This issue will run and run, and any company active in the EU would be well-advised to consider the potential impact. Separately, the European Parliament has established a “special committee” to conduct a general probe into tax evasion and fraud in the EU and the EC is working on various measures aimed at ensuring greater transparency on tax rulings.