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Belgium Responds To 'Excess Profit' Scheme Criticism

by Ulrika Lomas,, Brussels

12 January 2016

Belgium has not ruled out an appeal against the European Commission's decision that its "excess profit" tax scheme is illegal, the nation's Finance Minister has said.

The Commission on January 11 concluded that "selective tax advantages" granted by Belgium under its "excess profit" tax scheme are illegal under EU state aid rules. The Commission said that the scheme has benefited at least 35 multinationals, mainly from the EU, who must now return unpaid taxes, said to be worth EUR700m.

Johan Van Overtveldt said: "This decision is in line with the expectations. That is why I took action on this issue from the start. Following the first warning signs from the European Commission, we put the system on hold and did not issue any more Excess Profit Rulings (as from February 2015)."

"We now await the outcome of further negotiations with Europe regarding the possible reimbursements. Previous rulings represent approximately EUR700m. If Europe should decide that a reimbursement needs to be made, the consequences for the companies concerned would be considerable and the reimbursement itself would be particularly complex. During the negotiations, we will act in the interest of legal certainty and our economic foundations."

"The course of these negotiations will determine our stance in this matter. At this point we do not exclude any option. This also applies to the possibility of an appeal against the decision. In the following days and weeks we will continue to maintain close contacts with the European authorities concerned in this case."

TAGS: Finance | tax | investment | business | European Commission | Belgium | tax avoidance | interest | enforcement | ministry of finance | agreements | multinationals | tax planning | transfer pricing | advance pricing agreement (APA) | regulation | trade | European Union (EU) | business investment | Europe

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