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Danny McCance 16 Jul 2019 12:59pm

BT, GSK and Vodafone challenge EU tax ruling

Pharmaceuticals giant GSK and telecoms groups Vodafone and BT are among a group of companies appealing an EU ruling to claw back millions in taxes in the UK

At least 14 companies have filed appeals with the EU General Court in Luxembourg, according to Bloomberg.

BT filed a challenge on 4 July and GSK and Vodafone filed separate challenges a day later.

The recent appeals are allegedly against a ruling by the EU anti-trust regulator in April, which came after the European Commission found that a UK tax scheme offered illegal exemptions.

This ruling stated that the UK needed to recover millions from multinational companies after the previous tax breaks were found to have been illegal.

The Controlled Foreign Company rules, introduced by former chancellor George Osborne, were established to attract companies to the UK.

However they allowed for income earned by offshore subsidiaries to be exempt from tax, constituting state aid under EU rules, with justified preferential tax treatment being illegal according to EU rules.

In June, the UK Treasury lodged an annulment application in the General Court challenging.

A BT spokesperson said the company “can confirm that BT has filed an application to the EU General Court in relation to the European Commission’s decision in April 2019 on the UK’s Group Financing Exemption to the Controlled Foreign Company rules”.

A GSK spokesperson said, “We can confirm that GSK has submitted an appeal to the EC in respect of their decision in April 2019 on the UK’s Group Financing Exemption to the Controlled Foreign Company rules. We cannot comment further given this is an ongoing appeal.”

Vodafone has been contacted for comment.

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