EU court finds Belgium’s tax exemption for companies illegal

The European Union (EU) court ruled that the tax exemptions that Belgium offers to multinational companies are illegal.

The General Court, based in Luxembourg and within the structure of the European Court of Justice, the highest court of the EU, ruled on the case that Belgium brought against the EU Commission for the fine it received for its tax practices.

The court ruled that the tax exemptions that Belgium grants to subsidiaries of multinational companies constitute an illegal aid program.

The decision states that the court approved the EU Commission’s decision in 2016 that the tax system in Belgium violated the Union’s public support rules.

WHAT HAPPENED?

The tax exemption system, which began in Belgium in 2005 and was available to multinational companies, was declared illegal by the EU Commission in 2016.

The Commission requested the collection of unpaid taxes worth €700 million from 55 companies that benefited from the Belgian tax system.

Belgium and some companies launched legal proceedings before EU courts against this decision. (AA)