BRUSSELS, Sept 19 (Askume) – Britain won its battle against a European Union injunction on Thursday, the London Stock Exchange (ITV.L) said, acting on behalf of broadcaster ITV (LSEG.L).
The European Commission’s ruling, issued in 2019, a year after Britain left the 27-nation bloc, said Britain’s tax scheme contained illegal flaws.
The EU competition enforcer said Britain’s controlled foreign company (CFC) rules, designed to attract companies to set up headquarters in the country and prevent British firms from moving abroad, have given them an illegal advantage.
The Luxembourg-based Court of Justice of the European Union (CJEU) sided with the UK.
“The Commission and the General Court committed a legal error when they considered that the rules applicable to controlled foreign companies constituted the appropriate frame of reference for examining whether alternative benefits were provided,” the court said in a statement.
The Court stated that “the Court recalls that the Commission… is required in principle to accept a Member State’s interpretation of the relevant provisions of its domestic law, unless it can demonstrate that there are other interpretations prevailing in that Member State’s case law or in any administrative practice.”
The decision is final and cannot be appealed.
EU anti-competition chief Margrethe Vestager has made tax action a central focus of her work.
The Commission did not disclose which companies benefited from the scheme. However, BBA Aviation, Chemring (CHG.L) , Daily Mail & General, Diageo (DGE.L) , Euromoney, Inchcape (INCH.L) , Meggitt, Smith & Nephew (SN.L) and WPP (WPP.L) had EU investigations mentioned in their accounts.
The European Court of Justice upheld a €13 billion tax order against Apple last week , its biggest win to date.
The combined cases are C-555/22P United Kingdom v. Commission and Others, C-556/22P ITV v. Commission and Others, and C-564/22P LSEGH (Luxembourg) and London Stock Exchange Group Holdings (Italy) v. Commission.
