EU tax probe of Belgian deals

The EU is investigating Belgium’s tax deals with multinational corporations, potentially dragging dozens more companies into widening probes of sweetheart fiscal pacts handed out by national governments.

EU tax probe of Belgian deals

Building on investigations of Apple in Ireland and Amazon in Luxembourg, the European Commission is targeting Belgium’s so-called excess-profit rulings.

Companies could get deductions on 50% of the profits covered by the Belgian agreements and in some cases, as much as 90%, the regulator.

“This is a scheme for multinationals, not only American multinationals,” said EU Competition Commissioner Margrethe Vestager.

“It’s not for standalone businesses and it’s not for Belgian groups.”

The inquiry comes amid a global crackdown on corporate tax- avoidance as governments struggle to increase revenue and reduce deficits. The EU is also investigating accords for Starbucks in the Netherlands as well as Fiat Finance & Trade in Luxembourg.

The commission has said that tax avoidance and evasion in the EU cost about €1trn a year. Belgium has granted about 60 excess profit rulings, Belgian finance minister Johan Van Overtveldt told the country’s federal parliament in December.

Van Overtveldt said that while he is ready to share data with other EU nations about its estimated 5,000 tax rulings, he will not disclose excess profit cases because they contain sensitive information about commercial strategy.

Ferry Comhair, Van Overtveldt’s spokesman, did not immediately respond to an email and a call seeking comment on the EU announcement yesterday.

Vestager declined to name companies that may have benefited from the Belgian tax breaks. The commission said it considers the Belgian framework selective and may amount to an illegal subsidy.

Governments can be ordered by the EU regulator to claw back unfair aid that skews competition, including grants and tax breaks. Anheuser-Busch InBev NV said last year that Belgian tax inspectors are seeking to investigate a unit of the world’s biggest brewer.

De Tijd newspaper reported that a tax agreement allowed AB InBev to transfer €140m of profit from around the world over three years to a Belgian company that exists only on paper.

“We saw the excess profit tax scheme mentioned in the news and we took the lead from there,” Vestager said. “And here we are with an open investigation.”

The press office for Leuven, Belgium-based Anheuser-Busch InBev did not immediately respond to a call and email seeking comment.

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