Fiat Chrysler wins appeal against the EU

Fiat Chrysler wins appeal against the EU

Fiat Chrysler have won their appeal on Tuesday 8th November against an EU order to pay back taxes to Luxembourg of around 30 million euros (£26 million). This began as Margrethe Vestager tries to crack down on deals between EU countries and multinationals.

Vestager has claimed that in 2015, Fiat Chrysler was engaging complex strategies to lower the companies’ taxes which gave an unfair advantage and was granted by Luxembourg.

In 2019 a lower tribunal backed Vestager’s decision which The Court of the European Union (CJEU) then disagreed with this judgment.

Stellantis, the result of Fiat Chrysler and PSA Group merging in 2020, released a statement that said they are pleased that the CJEU has acknowledged the Commission was wrong to consider its tax ruling to be unlawful state aid.

Vestager tweeted the ruling was “a big loss for tax fairness”.

Vestager has been involved in some high-profile cases such as Apple and Amazon’s Luxembourg deal with a tax order for a record 13 billion euros (£11.4 billion). Apple and Amazon have won their lower tribunal cases which the Commission has appealed against with rulings due in the coming years.

Vestager is investigating Swedish furniture retailer Ikea and U.S. sportswear maker Nike’s (NKE.N) Dutch tax deals, Finnish food and drink packaging company Huhtamaki’s (HUH1V.HE) tax deal with Luxembourg and Belgium’s tax rulings on 39 multinational companies.

In October 2021, Organisation for Economic Co-operation and Development (OECD) said 136 countries agreed on taking a step towards making the world’s biggest companies to pay a fair share of tax, hoping for a global minimum corporate tax rate of 15% to be imposed by 2023.

The cases are C-885/19 P and C-898/19 P.

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3 arrested after Electronic Sales Suppression (ESS) crackdown

3 arrested after Electronic Sales Suppression (ESS) crackdown

HMRC has been targeting till fraud after new powers were introduced resulting in the arrest of 3 individuals across the UK.

Electronic Sales Suppression (ESS) systems help the user hide or reduce the cost of till sales to evade the correct tax to be paid. HMRC can now enforce fines of up to £50,000 and start criminal investigations as they increase efforts to target this tax evasion process.

30 shops, takeaways and restaurants were visited by HMRC officers across England on 18th May 2022 where 2 men and 1 woman were arrested in Nottinghamshire alleged to have been supplying ESS software.  The charges on the 3 people were suspicion of fraud and cheating the revenue.  

At 3 addresses, computers, digital devices, and paperwork was seized.  All 3 suspects have been released under investigation.

ESS works by the user taking the sale of goods using either ESS software or a modified Electronic Point of Sale (EPOS) which looks like the sales have genuinely gone through the system.  In actual fact the end-of-day reporting is manipulated to reduce reported takings, effectively avoiding any tax to be paid.

Once the HMRC have found the businesses using ESS, they can recover the tax evaded from the software or hardware which can result in criminal convictions.

HMRC offers a voluntary disclosure facility to anyone using an ESS to reduce any financial fines and penalties in the future.

Please find out more about tax investigations, COP 8 or COP 9, and contact Tax Advisory UK if any of these issues should affect you

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How far can a tax investigation go back?

How far can a tax investigation go back?

If you are under a tax investigation from the HMRC you may be wondering how far back in your company accounts the HMRC can look into.  There are a number of factors for HMRC to consider depending on the severity of any tax avoidance or tax evasion.

If the investigation is not as serious then HMRC can go back as far as 6 to 8 years in your accounts to find evidence of any tax fraud.  In the most serious of tax investigations, HMRC could request the company accounts for up to 20 years.  They will also look at overseas assets owned by who they are investigating as well.  Penalties and fines will be issued if HMRC concludes that you have been negligent of any tax fraud.

For detailed information on tax investigations please click:

Tax Investigations

Contact Tax Advisory UK today and we will arrange a meeting with some of the UK’s most qualified and experienced Chartered Tax Advisors to help with your tax investigation enquiries.  Please call 0203 965 3892.

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