Global Tax Adviser, January 19, 2016. The European Commission has concluded that selective tax advantages granted by Belgium under its "excess profit" tax regime are illegal under EU state aid rules. According to the Commission's announcement, which was released January 11, 2016, the regime has benefitted at least 35 multinationals, who must now return an estimated €700 million in unpaid taxes to Belgium. The Belgian "excess profit" tax regime has been applied since 2005 and has allowed certain multinational group companies to pay substantially less tax in Belgium on the basis of tax rulings.
The "excess profit" tax regime only benefitted certain multinational groups that were granted a tax ruling while "stand-alone companies" (i.e., companies that are not part of groups) only active in Belgium could not claim similar benefits. The EU found the regime was "a very serious distortion of competition" within the EU's single market, affecting a broad range of economic sectors.
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