Ruling for a second time on the referral of the case by the Court of Justice of the European Union (see EUROPE 12792/29), the EU General Court has, this time, confirmed the European Commission’s January 2016 decision finding that the Belgian system of exemption for ‘excess’ profits constituted a State aid scheme incompatible with the internal market (see EUROPE 11465/1), in a judgment delivered on Wednesday 20 September (Case T-131/16).
Between 2005 and 2015, the Belgian entities of 55 multinationals benefited from an advance ruling (tax ruling) from the Belgian tax authorities, when these entities could demonstrate the existence of a new situation (relocation of the central contractor to Belgium, creation of jobs or new investments). Profits considered to be ‘excess’ in that they exceeded the profits that comparable entities would have made in similar circumstances were exempt from corporation tax.
In its judgment, the General Court rejects all the arguments put forward by Belgium, including with regard to the financing of the scheme through State resources.
According to the General Court, the Commission has demonstrated that the scheme in question did grant tax advantages to its beneficiaries. In addition, the General Court considers that the Commission correctly concluded that the scheme was selective in that it introduced differential treatment between multinational groups in a comparable factual and legal situation.
The General Court added that the Belgian tax scheme in question was selective for two other reasons. Firstly, this scheme was not open to companies that had decided not to make investments in Belgium or create jobs there. Secondly, it was not open to companies that were part of a small group.
Consequently, on Wednesday, the General Court dismissed the 29 actions brought by multinationals against the European Commission’s decision.
See the General Court’s judgment: https://aeur.eu/f/8nx (Original version in French by Mathieu Bion)