An investigation is to be conducted by the European Union on Ireland, Luxembourg and the Netherlands for allegations these countries gave multinationals favorable tax deals over and above the EU's anti-competition rules.

According to the spokesman for European Commissioner Joaquin Almunia, Antoine Colombani, "We are collecting information on the subject." He added that the investigation is preliminary and it remains unclear whether it will leed to formal proceedings.

He further said, "It's too early in the day to speculate." He did say more EU countries may fall within the ambit of the investigation.

This comes at the heels of a renewed commitment among the world's biggest economies to intensify its efforts to combat tax avoidance within the European Union. The Brussels based competition authority had asked EU member governments to explain their system of tax rulings. There were also requests to provide details of tax assurances provided to several companies, such as Apple and Starbucks.