European Commission vs Belgium and Ireland, February 2019, General Court Case No 62016TJ0131

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In 2016, the Commission requested that Belgium reclaim around €700 million from multinational corporations in what the Commission found to be illegal state aid provided under the Belgian “excess profit” tax scheme. The tax scheme allowed selected multinational corporations to exempt “excess profits” from the tax base when calculating corporate tax in Belgium.

The European Court of Justice concludes that the Commission erroneously considered that the Belgian excess profit system constituted an aid scheme and orders that decision must be annulled in its entirety, in as much as it is based on the erroneous conclusion concerning the existence of such a scheme.

For state aid to constitute an ‘aid scheme’, it must be awarded without requiring “further implementing measures.”

According to court, “the Belgian tax authorities had a margin of discretion over all of the essential elements of the exemption system in question.” Belgium could influence the amount and the conditions under which the exemption was granted, which precludes the existence of an aid scheme.

For an aid scheme to exist EU regulation also requires, beneficiaries are defined “in a general and abstract manner” and the aid is awarded for an infinite period of time. This was not the case in the Belgian “excess profit” tax scheme.

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Judgement of the General Court, State Aid, Belgium, Ireland, Magnetrol International case no 62016TJ0131


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