Clifford Chance
Can the UK CFC rules survive the EC’s state aid investigation?
20 November 2017
The UK’s current CFC rules were created in the light of decisions of the CJEU and EFTA Court, which suggested that in most cases involving EEA subsidiaries it will be unlawful for the then existing CFC rules to apply at all. However, the European Commission has now opened a state aid investigation into the CFC rules on the basis that they and, in particular, the group financing exemptions are too generous. If the Commission concludes that the exemptions constitute unlawful state aid, UK-headquartered multinationals which have benefited from the exemptions could face significant liabilities for historic periods. Potentially affected groups may wish to take immediate steps to protect their position.
This article has been reproduced with permission from LexisNexis. It was first published in the 10 November 2017 issue of Tax Journal.
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