Belgium Loses Interim Step to Halt Excess Profit Tax Breaks

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By Kevin A. Bell

July 25 — Belgium lost an interim request that it shouldn't have to collect $700 million euros ($763 million) in taxes to recoup illegal tax breaks given to at least 35 companies, including Anheuser-Busch InBev NV and BP Plc.

The European Union General Court dismissed Belgium's request to stay the collection, saying “Belgium has failed to establish that, if the requested suspension of operation of the contested decision is not granted, it would be likely to suffer serious and irreparable harm.”

The July 19 interim order, by EU General Court President Marc Jaeger, isn't the final step in Belgium's appeal of the EU Commission's Jan. 11 decision, which found the country's excess profit regime constituted unlawful state aid (66 TMIN, 4/6/16).

Still at issue before the court is Belgium's full challenge of the Commission's decision that the nation's excess profit tax ruling system deviated from the arm's-length principle under the Organization for Economic Cooperation and Development's transfer pricing guidelines and constituted state aid to the companies receiving the rulings.

In the Jan. 11 decision, the European Commission told Belgium to claw back the full unpaid tax by the 35 global companies saying that excess-profit rulings allowed global corporations to reduce their tax base by as much as 90 percent. Belgium had offered a tax break to multinationals since 2005, allowing them to deduct profits from their taxes due to supposed intra-group synergies and economies of scale, the commission said.

Belgian authorities said the incentive was justified to prevent double taxation.

Most of the companies that benefited from the Belgian tax break, in place since 2005, are European and, unless Belgium wins the court battle, will have to repay about 500 million euros of the estimated 700 million euros in total (07 TMIN, 1/12/16)

To contact the reporter on this story: Kevin A. Bell in Washington at

To contact the editor responsible for this story: Rita McWilliams at

For More Information

The EU General Court interim decision is at

The Jan. 11 EU Commission decision on Belgium's excess profits tax is at

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