Brussels, 14/11/2007 (Agence Europe) - The European Commission announced on 13 November that it had modified the transitional measures granted to Belgian coordination centres. This decision retrospectively authorises centres whose authorisations expired between 17 February 2003 and 31 December 2005 to benefit from the arrangements until the latter date. The authorisations which expire between the beginning of 2006 and the end of 2010 will be allowed to run their course, but no new authorisations or renewals of existing authorisations are allowed during this period.
The “coordination centre” system principally helps industrial enterprises to minimise taxation and enterprises in difficulty or undergoing restructuring. The formula is simple: the enterprises acquire participation in their coordination centre. They thereby receive dividends which are tax-exempt. When they need cash, they borrow from the centre on interest, with the interest deductible as a charge. On 17 February 2003, the European Commission decided that this arrangement was no longer compatible with the rules on state aid, as the exemptions granted to the centres cumulatively fulfil the four criteria which define state aid: they constitute an economic advantage; they come from state resources; they are of benefit only to certain enterprises and because of the multinational nature of the group to which the centre belongs; they threaten competition and intra-EU trade.
On 22 June 2006, the European Court of Justice annulled a part of the Commission's decision of 2003. The Court recognised the incompatibility of the coordination centres with the common market, but judged that the Commission's decision should have envisaged transitional measures to avoid making the change too much of a burden for the enterprises concerned. In particular, the Commission's decision was likely to create discrimination between enterprises: it allowed coordination centres with authorisations valid until after 17 February 2003 to benefit from the application of the system until the expiry of their authorisation (the end of 2010 at the latest); but centres whose authorisations expired before February 2003 were deprived of the opportunity to renew them. It was therefore this element of the decision which was annulled by the Court in 2006 (joint cases C-182/03 and C-217/03).
Following this judgement, the Commission adopted a second decision which was announced on Tuesday. Under this decision the authorisations, which expired between 13 February 2003 and the end of 2005, will be retrospectively considered to be automatically valid until the end of 2005. Authorisations which expire after this date will be valid until their expiry, at the latest the end of 2010. The Commission clarified that it will not, however, authorise the renewal or prolongation of authorisations during this period, contrary to the provisions of a law which Belgium, buoyed up by the aforementioned Court judgement, adopted in 2006. Although a communication was sent by the Commission on Tuesday, the Belgian authorities declared on Wednesday morning that they had not received official notification, and therefore had no comment to make. (C.D.)