EU Starts Big Firm Tax Inquiry Into Belgium

Written By Unknown on Rabu, 04 Februari 2015 | 00.25

Belgian tax arrangements for multinational firms are being investigated over claims of unfair state aid, it has been confirmed.

EU Competition Commissioner Margrethe Vestager said Belgium's system may breach the existing rules.

She said that it "appears to grant substantial tax reductions only to certain multinational companies".

The investigation centres on the tax ruling of "excess profit" in the country, where a company's tax can be reduced.

She added: "The Belgian 'excess profit' tax system appears to grant substantial tax reductions only to certain multinational companies that would not be available to stand-alone companies.

"If our concerns are confirmed, this generalised scheme would be a serious distortion of competition unduly benefitting a selected number of multinationals.

"As part of our efforts to ensure that all companies pay their fair share of tax, we have to investigate this further."

The commission is based in the Belgian capital, Brussels.

According to the Belgian tax provision, profits registered in the accounts that gain an advantage of being part of a multinational group.

Deductions can be applied but only if the company gains a tax ruling confirmation by the Belgian tax administration.

The EU says the scheme appears to only benefit multinational groups, whereas Belgian companies only active in Belgium are not given similar benefits.

Belgium says the tax provision is in line with the general OECD "arm's length" operating principle.

However, prior to further examination the commission doubts that the interpretation of the OECD principle is valid and no double taxation takes place.

A number of nations are under scrutiny over state aid rules.

The EU started investigations last June over Apple in Ireland, Starbucks in the Netherlands and Fiat Finance in Luxembourg.

In October it also started to examine Amazon's arrangements with officials in the Grand Duchy, bringing its former leader Jean Claude Juncker - now EU president - into the contentious issue.


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