Belgium’s ‘excess-profits’ tax breaks declared illegal

Belgium’s tax breaks to about 35 multinationals, reportedly including British American Tobacco, have been found to violate EU state aid rules, according to an Agence France Presse story relayed by the TMA.

The EU Competition Commissioner, Margrethe Vestager, was said to have ordered that the companies hand over €700 million (US$762.3 million) in unpaid taxes.

Vestager said the Commission had concluded that “selective tax advantages granted by Belgium under its ‘excess profit’ tax scheme were illegal under EU state aid rules”. The tax breaks had distorted competition by putting smaller competitors on an unequal footing, she said.

Belgium’s tax system has allowed companies to reduce their taxes by registering ‘excess profits’ that are said to result from the advantage of being part of a multinational group.

The story said also that the EU had launched investigations into tax deals operated in Ireland, Luxembourg and the Netherlands.