Belgian tax breaks that cut bills up to 90% ruled illegal

About 35 mostly European multinationals, including the world’s largest brewers, have received illegal tax breaks that cut their bills by up to 90% in Belgium, according to the European Commission.

The Belgian tax scheme is the latest to be rejected as illegal state aid by the Commission that is also investigating Ireland’s arrangement with Apple, in a case that is running on much longer than expected.

Last week Finance Minister Michael Noonan said it appeared the decision on Ireland’s tax deal with Apple would now be given after the election.

Competition commissioner Margrethe Vestager yesterday would not give a date for a final decision on the Apple case, or Amazon in Luxembourg, saying she found she “needed patience of steel” as additional elements arose during the investigation.

The finding against Belgium is the first time the Commission found an entire tax tax break system in a country to be illegal, and it follows on from findings against individual companies such as Luxembourg’s deal with Fiat and the Netherlands with Starbucks.

Belgium must claw back €700 million (3 million) after EU rules tax deals illegal https://t.co/fgMgwoslRJ pic.twitter.com/T7sRuQUy9j

— Bloomberg (@business) January 11, 2016

The Dutch and Luxembourg governments are considering appealing but it was unclear whether Belgium will do likewise.

Finance Minister Johan Van Overtveldt said reimbursement would be very complex, they will try to negotiate with the Commission and will then decide whether to appeal the decision to the European Court.

Anheuser-Busch InBev, the world’s largest brewer and headquartered in Belgium, is understood to be one of the companies.

They are in negotiations to buy the world’s second largest brewer, SAB Miller for around €100bn.

The companies, mainly production firms all with branches in Belgium, must repay €700m to the Belgian exchequer, with the majority, €500m, owed by European companies that made up more than half those involved.

The US has accused the EU of targeting American multinationals, which the Commission has denied.

Marketed as “Only in Belgium”, it benefited companies that were part of multinational groups.

Belgium argued the scheme was justified to prevent double taxation.

Announcing the decision Commissioner Vestager said: “We know of no other schemes similar to this — which is probably why it was named “Only in Belgium”.