EU probes French gas giant Engie’s Luxembourg tax deals

The EU launched an in-depth probe Monday into alleged sweetheart tax deals between French gas group Engie and Luxembourg, taking on a major European multinational after similar high-profile investigations into US giants.

The probe into a company owned in part by the French state comes days after the Commission angered Washington by ruling that US tech icon Apple had received favourable tax terms and ordered it to repay 13 billion euros in back-taxes to Ireland.

“The Commission has concerns that several tax rulings issued by Luxembourg may have given GDF Suez (now Engie) an unfair advantage over other companies, in breach of EU state aid rules,” the European Union’s executive arm said in a statement.

The investigation into one of France’s biggest and most strategic companies opens on the same day as a visit by EU Competition Commissioner Margrethe Vestager to Washington, where she is to meet top US officials amid continued complaints over her Apple decision.

“We will look carefully at tax rulings issued by Luxembourg to GDF Suez,” Vestager said in the Commission statement.

“They seem to contradict national taxation rules and allow GDF Suez to pay less tax than other companies,” she added.

The Commission said Luxembourg is suspected of having afforded Engie subsidiaries different tax treatments on the same transactions, lowering the company’s overall tax exposure significantly.

Luxembourg’s tax authorities “appear to treat the same financial transaction between companies of GDF Suez in an inconsistent way,” the Commission said.

This resulted in tax breaks “which are not available to other companies subject to the same national taxation rules in Luxembourg,” it added.