Belgium gave illegal tax breaks worth €700 million, EC rules

At least 35 companies have benefitted from an illegal "excess profit" tax scheme 

Hazel Sheffield
Monday 11 January 2016 13:09 GMT
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European Commissioner for Competition Margrethe Vestager speaks during a press conference at the European Parliament in Strasbourg, eastern France, on September 8, 2015
European Commissioner for Competition Margrethe Vestager speaks during a press conference at the European Parliament in Strasbourg, eastern France, on September 8, 2015

Belgium gave tax breaks to multinational companies that were illegal under EU state rules, the European Commission has ruled.

At least 35 companies have benefitted from an illegal "excess profit" tax scheme since it was introduced in 2005. They must now pay back €700m in unpaid tax.

Companies including Lucky Strike cigarette maker British American Tobacco and Stella Artois brewer AB InBev benefitted from the scheme, according to the FT.

A spokesperson from AB InBev told the Independent: "While we are disappointed by this decision, we remain confident that our tax rulings are in full compliance with the EU jurisprudence on state aid and that we have always complied with Belgian and international tax provisions."

Commissioner Margrethe Vestager said the deal was unfair to smaller companies.

"It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing," Vestager said.

The tax scheme was marketed with the tagline "only in Belgium", to encourage investment in the country.

It allowed businesses to exclude a chunk of their profits from their tax bill.

The EC has the power to force governments to claw back unpaid taxes from as far back as 10 years.

The Belgian case follows the EC's decision that Starbucks and Fiat must repay millions in unpaid tax bills after deals between the two companies were found not not comply with EU tax rules.

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