EU launches in-depth probes into Belgian tax benefits for 39 companies

According to Commission's preliminary view the tax rulings under investigation selectively misapplied the Belgian income tax code

Photo: EPA Commissioner Margrethe Vestager in charge of competition policy

The European Commission has opened separate in-depth investigations to assess whether “excess profit” tax rulings granted by Belgium to 39 multinational companies gave those companies an unfair advantage over their competitors, in breach of EU State aid rules. Today's opening decisions follow the General Court's February 2019 annulment of the Commission's January 2016 decision concluding that the same tax rulings formed part of a Belgian aid scheme that was illegal under EU State aid rules.

The Court did not take a position on whether or not the “excess profit” tax exemptions gave rise to illegal State aid but found that the Commission had failed to establish the existence of a scheme. This means that, according to the General Court, the compatibility of the tax rulings with EU State aid rules needs to be assessed individually, which is why the Commission has now opened separate in-depth investigations into the individual tax rulings. 

The in-depth investigations concern individual "excess profit" tax rulings issued by Belgium between 2005 and 2014 in favour of 39 Belgian companies belonging to multinational groups The Commission has concerns that the tax rulings may have given a selective advantage to the 39 multinational companies, allowing them to pay substantially less tax.

At the same time, the Commission has appealed the judgment of the General Court to the European Court of Justice to seek further clarity on the existence of an aid scheme. These proceedings are ongoing.  

"All companies must pay their fair share of tax. We are concerned that the Belgian "excess profit" tax system granted substantial tax reductions only to certain multinational companies that would not be available to companies in a comparable situation," Commissioner Margrethe Vestager in charge of competition policy commented.

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