The European Commission has opened an in-depth investigation into a Belgian tax provision, which allows group companies, particularly large multinational corporations (MNCs), to substantially reduce their corporation tax liability in Belgium on the basis of so-called 'excess profit' tax rulings agreed on an individual basis with the tax authorities
At this stage, the Commission has not named the company or companies under investigation but affected parties will have been contacted to advise them of the issues.
Meantime, the Commission has to prepare a non-confidential version of the report, with the agreement of interested stakeholders, which will then be published in the official EU Journal. This can take up to six months to complete and publish. Based on these timings, details are unlikely to be released before mid 2015 at the earliest.
The tax rules allow multinational companies in Belgium to reduce their corporate tax liability by ‘excess profits’ that allegedly result from the advantage of being part of a multinational group.
However, the Commission is once again considering whether the tax arrangements comply with EU state aid rules, which have been used in various investigations into tax dealings with multinationals in Luxembourg, the Netherlands and Ireland.
