EU court says $748 mln Belgian tax scheme is illegal state aid

The EU Court of Justice, Europe's top court, in 2021 however sided with the EU competition enforcer and referred the case back to the lower tribunal. "The tax exemptions granted by Belgium to companies forming part of multinational groups constitute an unlawful aid scheme," the General Court said on Wednesday, agreeing with the Commission that the scheme was selective as it favoured some companies.

European Union's second-top court on Wednesday backed an EU competition regulator's decision against a 700-million-euro ($748 million) Belgian tax scheme for 55 multinationals, in a major win for EU antitrust chief's crackdown on sweetheart tax deals. The Luxembourg-based General Court had in 2019 annulled Margrethe Vestager's decision after Belgium and about 30 of the companies challenged it.

Beneficiaries of the Belgian scheme that dated from 2005 included U.S. manufacturer Magnetrol, oil company BP, chemical producer BASF, Wabco, Cellio, Atlas Copco and Belgacom, now Proximus . The EU Court of Justice, Europe's top court, in 2021 however sided with the EU competition enforcer and referred the case back to the lower tribunal.

"The tax exemptions granted by Belgium to companies forming part of multinational groups constitute an unlawful aid scheme," the General Court said on Wednesday, agreeing with the Commission that the scheme was selective as it favoured some companies. A Belgian Finance Ministry spokesperson said the ministry was studying the verdict.

"The scheme at issue was selective because it was not open to companies that had decided not to make investments, centralise activities or create employment in Belgium. The scheme at issue was, moreover, also selective because it was not open to undertakings that were part of a small group," the General Court said. Belgium can still appeal to the EU Court of Justice.

The case is T-131/16 RENV | Belgium v Commission. ($1 = 0.9354 euros)

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