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Belgium’s excess profit tax scheme is illegal.
The European Commission has concluded that Belgium’s excess profit tax scheme is illegal under EU state aid rules. The multinational businesses mainly from the EU must now repay unpaid taxes to Belgium. The commission estimates the total amount to be recovered from the companies to be about €700m.
The scheme has been in place since 2005. It allowed multinational group companies to reduce the tax they paid in Belgium by between 50% and 90% to discount for excess profits that allegedly result from being part of a multinational group. As a result of an investigation the commission concluded that the scheme derogated from normal practice under Belgian company tax rules and the arm’s length principle.
Since the start of the investigation Belgium has put the scheme on hold and has not granted any new...
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