Tags: belgian | tax | breaks | eu

Belgian Tax Breaks for Multinationals Probed by European Union

Tuesday, 03 Feb 2015 06:29 AM

Belgium faces a European Union probe into its tax deals with multinationals as the EU escalated an investigation into sweetheart fiscal pacts including Apple Inc.’s accord with Ireland and Luxembourg’s agreement with Amazon.com Inc.

The European Commission is targeting Belgium’s so-called excess-profit rulings, the regulator said in an e-mailed statement. Multinationals can get deductions exceeding 50 percent of the profits covered by the tax rulings granted by Belgium, and can sometimes reach 90 percent, the regulator said.

“The Belgian ‘excess profit’ tax system appears to grant substantial tax reductions only to certain multinational companies that would not be available to stand-alone companies” that don’t operate internationally, said EU Competition Commissioner Margrethe Vestager. “If our concerns are confirmed, this generalized scheme would be a serious distortion of competition unduly benefiting a selected number of multinationals.”

The EU inquiry into Belgium comes amid a global crackdown on corporate tax-avoidance as governments struggle to increase revenue and reduce deficits. It expands a probe into Apple in Ireland and Starbucks Corp. in the Netherlands as well as Amazon and Fiat Finance & Trade in Luxembourg. The commission has said tax avoidance and evasion in the EU cost about 1 trillion euros ($1.13 trillion) a year.

Companies needs prior confirmation by the Belgian tax administration through a tax ruling for the excess-profit deductions to apply, the commission said.

The commission said it considers this legislative framework is 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.

 

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Belgium faces a European Union probe into its tax deals with multinationals as the EU escalated an investigation into sweetheart fiscal pacts including Apple Inc.'s accord with Ireland and Luxembourg's agreement with Amazon.com Inc.The European Commission is targeting...
belgian, tax, breaks, eu
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2015-29-03
Tuesday, 03 Feb 2015 06:29 AM
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