Luxemburg and the Netherlands were recently ruled to have provided government "subsidies" to subsidiaries of multination corporations within both country's respectively. According to the rules of the EU, such state sponsored subsidy's are illegal and the European commission have ruled that they each paid 20-25 million Dollars less than what they both owed. Both Countries have resorted to appeal this decision because they feel that this will deter investment in the future. tax avoidance is a major issue in the international community whereby multinational firms attempt to shift their business to countries where they feel they will be taxed a lesser amount. While this sounds well and good, there are certain particulars to this case that made the commission question the validity of the exchanges going on. Upon close examination, the commission found that there was a manipulation in the amounts for which different subsidiaries of the same MNC were found selling goods to one another, basically a change in the transfer prices that wasn't adding up in both countries. While there were undervaluations on both ends, MNCs essentially worked a way around the system in order to pay a fraction of the tax that they were supposed too.
MNCS go through such complicated structures in order to avoid paying corporate taxes and it seems that the involvement of these respective governments is in question regarding how active a process they played in helping out such MNCs. Regardless, MNCs would rather prefer taxes than court dates.
http://www.economist.com/news/finance-economics/21676785-corporate-tax-europe-set-change-european-commission-attempts-outlaw
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