EU to probe tax break by Britain for multinationals

As Brexit talks continue to founder, the EU attacked a tax break designed to lure big companies to Britain in a clampdown that could trigger legal wrangling lasting long after the UK is scheduled to leave the EU.

The European Commission opened an in-depth probe into Britain’s group financing exemption which allows companies active in the country to pay little or no tax on financing income received from another foreign unit via an offshore subsidiary. EU competition laws “continue to apply in full” until Britain is no longer a member of the bloc, it said.

“Of course this was unfair competition,” said Richard Murphy, a professor at City University, London.