Tag: Abnormal and gratuitous advantages

Belgium, December 2021, Constitutional Court, Case No 184/2021

Belgium, December 2021, Constitutional Court, Case No 184/2021

By a notice of December 2020, the Court of Appeal of Brussels referred the following question for a preliminary ruling by the Constitutional Court : “ Does article 207, second paragraph, ITC (1992), as it applies, read together with article 79 ITC (1992), in the interpretation that it also applies to abnormal or gratuitous advantages obtained by a Belgian company from a foreign company, violate articles 10, 11 and 172 of the Constitution? “. The Belgian company “D.W.B.”, of which Y.S. and R.W. were the managers, was set up on 4 October 2006 by the Dutch company “W.”. On 25 October 2006, the latter also set up the Dutch company “D.W.” On 9 November 2006, bv “W.” sold its shareholdings in a number of subsidiaries of the D.W. group to its subsidiary nv ” D.W. “. It was agreed that 20 % of the selling price would be contributed by e.g. “W.” to the capital of the latter and that ... Read more
Belgium vs "Uniclick B.V.", June 2021, Court of Appeal, Case No 2016/AR/455

Belgium vs “Uniclick B.V.”, June 2021, Court of Appeal, Case No 2016/AR/455

“Uniclick B.V.” had performed all the important DEMPE functions with regard to intangible assets as well as managing all risks related to development activities without being remunerated for this. Royalty-income related to the activities had instead been received by a foreign group company incorporated in Ireland and with its place of management in Luxembourg. In 2012, the administration sent notices of amendment to the tax return to the respondent for assessment years 2006 and 2010. The tax administration stated that “Uniclick B.V.”, through its director B.T. and employees M.C. and S.M., invented and developed the Uniclic technology in 1996 and continued to exploit it, and that the subsequent transfer of rights to the Uniclic invention to U.B. BV was simulated. The administration added the profits foregone annually by the “Uniclick B.V.”, i.e. the royalties received by F. from third party licensees less the costs borne by F., to “Uniclick B.V’s” taxable base. “Uniclick B.V.” disagreed with this and argued, among ... Read more
Belgium vs ENGIE CC cv, January 2021, Supreme Court, Case No F.18.0140.N

Belgium vs ENGIE CC cv, January 2021, Supreme Court, Case No F.18.0140.N

ENGIE CC granted a loan to one of its group companies (Electrabel Nederland Holding bv). In 2005 Electrabel Holding bv repaid the loan prematurely and paid – as contractually stipulated – a reinvestment fee of EUR 5,611,906.11 to the plaintiff. Following a tax audit in 2008, the tax authorities established that an incorrect interest rate had been used and that the reinvestment fee should only have been EUR 2,853,070.69, hence EUR 2,758,835.42 was overpaid. The tax authorities issued an assessment to ENGIE, according to which the excess amount would be taxed as an abnormal or gratuitous advantage. ENGIE then took the unilateral initiative to repay the excess amount to Electrabel Nederland Holding bv. On that basis ENGIE contested the qualification of the excessive part of the reinvestment fee as an abnormal or gratuitous advantage, since it would have been an error and therefore an undue payment. The Court of First Instance and later the Court of appeal, declared the complaint and ... Read more
Belgium vs ALCOPA N.V, September 2020, Supreme Court, Case No RG F.19.0056.N

Belgium vs ALCOPA N.V, September 2020, Supreme Court, Case No RG F.19.0056.N

The dispute concerns a tax assessments issued by the plaintiff (the Belgian tax administration) for FY 2002 and 2003. In particular, the claimant (Alcopa N.V – the first company to sign a European distribution contract with Hyundai) contests the classification of reimbursements received from the Korean company HYUNDAI MOTOR COMPANY for publicity services, for an amount of EUR 1,965,630.46 in assessment year 2002 and for an amount of EUR 1,057,007.00 in assessment year 2003, as abnormal or gratuitous benefits and the consequent rejection of the DBI [Definitief Belaste Inkomsten] deduction from the profits arising from those abnormal or gratuitous benefits in application of Section 207 ITC92. The Antwerp Court of First Instance, Antwerp Division, ruled by judgment dated 13 January 2016 that it was indisputably established that abnormal or gratuitous benefits were granted to the plaintiff, so that the tax administration correctly applied Section 207(2) ITC92 and did not allow a DBI deduction on these benefits. According to the first ... Read more
Belgium vs Fortum Project Finance, May 2019, Court of Appeal in Antwerp, Case No F.16.0053.N

Belgium vs Fortum Project Finance, May 2019, Court of Appeal in Antwerp, Case No F.16.0053.N

Fortum Project Finance (Fortum PF’) is a Belgian company, founded in 2008 by Fortum OYI, a Finnish company, and Fortum Holding bv, a Dutch company. The establishment of Fortum PF was part of an acquisition that the Finnish company Fortum OYI, through its Swedish subsidiary Fortum 1AB, had in mind in Russia. However, the financing of this Russian acquisition did not go directly through Sweden but through Fortum PF in Belgium. Two virtually identical loan contracts were drawn up simultaneously on 19 March 2008. First, Fortum OYI granted credit facilities of EUR 3,000,000,000 to Fortum PF and with a second loan, Fortum PF ‘passed on’ the same amount to Fortum 1AB of Sweden. The funds, intended for the acquisition in Russia, did not pass through Belgium but went directly to Russia. 10 days later, capital increases were made to Fortum PF, with the Finnish company Fortum OYI contributing part of its loan to Fortum PF. In this way, a total ... Read more