The EC is currently investigating under the State aid rules tax ruling practices in Ireland, Luxembourg, the Netherlands and Belgium. Broadly, the issue is selective advantageous treatment of particular companies or types of companies, which might be illegal under EU State aid law.

Separately, the EC proposed on 18 March 2015 a package of tax transparency measures designed to tackle “corporate tax avoidance and harmful tax competition in the EU”. The central component of the package is a legislative proposal to improve cooperation between EU member states in relation to their cross-border tax rulings.

Currently, member states share very little information with one another about their tax rulings since it is a matter for the discretion of the member state to decide whether a tax ruling might be relevant to another EU country. The EC considers that the lack of transparency on tax rulings is being exploited by certain companies in order to artificially reduce their tax contribution.

To redress this situation, the EC proposes that member states will be required to automatically exchange information on their tax rulings. The idea is that this will enable member states to detect certain abusive tax practices by companies and take the necessary action in response. It should also encourage healthier tax competition, as tax authorities will be less likely to offer selective tax treatment to companies once this is open to scrutiny by their peers.

The legislative proposals of this package will be submitted to the European Parliament for consultation and to the Council of the EU for adoption. The EC hopes that member states will agree on the tax rulings proposal by the end of 2015, so that it can enter into force on 1 January 2016.