EU: EC opens in-depth probes into individual “excess profit” tax rulings granted by Belgium

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. 

Monday, September 16’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. 

Commissioner Margrethe Vestager in charge of competition policy said, “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. Following the General Court’s guidance, we have decided to open separate State aid investigations to assess the tax rulings. We also await further clarity from the European Court of Justice on the existence of an aid scheme.”

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