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No. 5: Margrethe Vestager

07 December 2017

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EU Competition Commissioner Margrethe Vestager, who joins the ranks of the Global Tax 50 for the fifth year in a row and took top spot in last year’s ranking, has had a quieter 12 months in 2017 compared to previous years. But that’s not to say multinationals aren’t still trembling with fear at the thought of being faced with state aid allegations from the determined commissioner.

Margrethe Vestager
Margrethe Vestager was also in the Global Tax 50 2016, 2015, and  2014

Amazon is the latest company to be slapped with a bill from Vestager for illegal state aid. The decision said the online retailer had received approximately €250 million of illegal tax benefits as a result of a tax ruling granted by Luxembourg. The ruling had lowered Amazon's tax bill without any valid justification, Vestager said, and allowed the company to avoid paying taxes on three quarters of its profits.

€250 million isn't a whole lot of money compared to the amounts in other cases Vestager has taken on – famously, Apple was fined €13 billion in August 2016 for allegedly receiving illegal tax benefits from Ireland. When the money still wasn't recovered by October this year, Vestager's patience wore thin and she took Ireland to court for moving too slowly.

"More than one year after the commission adopted this decision, Ireland has still not recovered the money," Vestager said. "We of course understand that recovery in certain cases may be more complex than in others, and we are always ready to assist. But member states need to make sufficient progress to restore competition. That is why we have today decided to refer Ireland to the EU Court for failing to implement our decision."

Ireland replied by saying it had never accepted the Commission's state aid decision, and said it was "extremely disappointing" that the commission had decided to take action.

The commissioner's investigations into Apple, Starbucks and McDonald's have given her a reputation of being on the warpath with Silicon Valley, and many politicians and CEOs across the Atlantic are weary of her singling out American companies. Responding to these allegations the commissioner simply stated that "it is irritating when American companies pay less in taxes than European ones".

Vestager recently confirmed that the fight will go on. On the question of future tax investigations, Vestager shook her head and said: "I don't think we're done. We haven't changed the full corporate culture yet."

The Dane has also been involved in a long-running state aid dispute over corporate tax exemptions for ports, which began in 2013, and in August she told France and Belgium to get rid of exemptions because they "distort the level playing field and fair competition". While the countries must abolish the exemptions by January 1 2018, they will not have to recover any of the aid, the commissioner said.

Vestager has made it her mission to address tax avoidance by multinationals through competition and state aid rules – something that makes her stand out from predecessors. With her term as competition commissioner running until 2019, multinationals will be holding their breath for at least two more years.

The Global Tax 50 2017
View the full list and introduction
The top 10 • Ranked in order of influence
1. US Tax Reform Big 6 2. Dawn of the robots
3. The breakdown of global consensus 4. The fifth estate
5. Margrethe Vestager 6. Arun Jaitley
7. Sri Mulyani Indrawati 8. Pascal Saint-Amans and Achim Pross
9. Richard Murphy 10. Cristiano Ronaldo and Lionel Messi
The remaining 40 • In alphabetic order
Tomas Balco Piet Battiau
Monica Bhatia Blockchain
Rasmus Corlin Christensen Seamus Coffey
Jeremy Corbyn Rufino de la Rosa
Fabio De Masi The Estonian presidency of the Council of the European Union
Maria Teresa Fabregas Fernandez The fat tax
Maya Forstater Babatunde Fowler
The GE/PwC outsourcing deal The Gulf Cooperation Council (GCC)
International Consortium of Investigative Journalists (ICIJ) Meg Hillier
Chris Jordan Wang Jun
James Karanja Bruno Le Maire
John Pombe Joseph Magufuli Cecilia Malmström
The Maltese presidency of the EU Council Paige Marvel
Theresa May Angela Merkel
Narendra Modi Pierre Moscovici
The European Parliament Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) The Paris Agreement
Grace Perez-Navarro Alexandra Readhead
Heather Self TaxCOOP
Tax Justice Network Donald Trump
United Nations Committee of Experts on International Cooperation in Tax Matters WU Global Tax Policy Center

International Correspondents