A Dutch company transferred receivables to a low-tax affiliated entity under a factoring arrangement, reducing its Dutch taxable base. The Amsterdam Court of Appeal accepted the arm's length defence, but the Dutch Supreme Court annulled that decision in 2025, finding insufficient reasoning on comparability, risk allocation, and business substance. The case was remanded to a different Court of Appeal for reconsideration ... Read more

A Dutch company transferred receivables to a low-tax affiliated entity under a factoring arrangement, reducing its Dutch taxable base. The Amsterdam Court of Appeal accepted the arm's length defence, but the Dutch Supreme Court annulled that decision in 2025, finding insufficient reasoning on comparability, risk allocation, and business substance. The case was remanded to a different Court of Appeal for reconsideration ... Read more

The Italian tax authorities assessed additional income on non-interest bearing loans granted by Sadepan Chimica S.R.L. to its foreign subsidiaries in Belgium and Luxembourg, applying notional rates of 3.83% and 5.32%. The taxpayer appealed, arguing authorities ignored specific financial conditions and misallocated the burden of proof. Italy's Supreme Court ruled in favour of the taxpayer in March 2024, finding the comparability analysis was insufficient ... Read more

Belgium operated a tax ruling system since 2005 allowing group companies to exempt 'excess profits' from corporate income tax. The European Commission found this constituted an unlawful state aid scheme and ordered recovery from 55 companies. After the General Court initially annulled the decision and the Court of Justice overturned that ruling, the EU General Court in 2023 ultimately upheld the Commission's position on remand ... Read more

Flir Commercial Systems AB sold intangible assets from its Belgian branch in 2012 and claimed relief exceeding SEK 2 billion for fictitious Belgian tax. The Swedish Tax Agency denied the credit and imposed an SEK 800 million surcharge. The Administrative Court of Appeal upheld both decisions in 2022, finding that the Sweden-Belgium tax treaty prevented Belgium from taxing value accrued while assets were held in Sweden, making any notional tax credit impermissible ... Read more

A German parent company maintained an uncollateralised clearing account bearing 6% interest for its Belgian subsidiary, later waiving the debt. The tax authority disallowed the profit reduction under section 1 AStG due to lack of collateralisation. The Bundesfinanzhof remanded the case to the FG Düsseldorf in 2022 to determine whether the arrangement constituted a recognisable loan or a disguised equity transfer by the shareholder ... Read more

Belgium operated a tax ruling system exempting excess profits of Belgian entities within multinational groups from corporate income tax since 2005. The European Commission found this constituted an unlawful State aid scheme in 2016. After the General Court annulled that decision, the European Court of Justice reversed the annulment in September 2021, restoring the Commission's finding and remanding the case for re-examination ... Read more

The Advocate General delivered an opinion in December 2020 proposing that the Court of Justice set aside the 2019 General Court judgment in the European Commission's case against Belgium and Magnetrol International. The AG concluded that the Commission had sufficiently demonstrated that Belgium's practice of making downward profit adjustments for multinational group members constitutes an aid scheme under Article 1(d) of Regulation 2015/1589, finding the appeal well founded ... Read more

Flir Commercial Systems AB sold intangible assets from its Belgian branch in 2012 and claimed over SEK 2 billion in relief for fictitious Belgian tax. The Swedish Tax Agency denied the relief and imposed an SEK 800 million surcharge. The Stockholm Administrative Court upheld both decisions in 2020, finding the Sweden-Belgium tax treaty prevented Belgium from taxing the assets, making any fictitious tax non-deductible ... Read more

In a public statement the French General Directorate of Public Finance clarified that tax treatment of interest deductions taken by a French company on interest payments to a related Belgian company that benefits from the Belgian notional interest rate scheme. According to French Law, interest paid to foreign group companies is only deductible if a minimum rate of tax applies to the relevant income abroad. Click here for translation ... Read more

In March 2018 a special EU committee on financial crimes, tax evasion and tax avoidance (TAX3) was established. Now, one year later, The EU Parliament has approved a controversial report from the committee. According to the report close to 40 % of MNEs’ profits are shifted to tax havens globally each year with some European Union countries appearing to be the prime losers of profit shifting, as 35 % of shifted profits come from EU countries. About 80 % of the profits shifted from EU Member States are channelled to or through a few other EU Member States. The latest estimates of tax evasion within the EU point to a figure of approximately EUR 825 billion per year. Tax avoidance via six EU Member States results in a loss of EUR 42,8 billion in tax revenue in the other 22 Member States, which means that the net payment position of these countries can be offset against the losses they inflict ... Read more

The European Commission ordered Belgium to reclaim approximately €700 million from multinationals under its excess profit tax exemption scheme, finding illegal state aid. The EU General Court annulled the decision in 2019, ruling the Commission had wrongly classified the scheme as an aid scheme, since Belgian tax authorities retained discretion over essential elements and beneficiaries were not defined in a general and abstract manner ... Read more

Belgium operated an excess profits tax exemption allowing Belgian group entities to exclude profits attributed to group synergies from taxable income. The European Commission ruled in 2016 that this constituted unlawful state aid, ordering recovery. The EU General Court annulled the Commission's decision in 2019, finding against the Commission's state aid classification of Belgium's excess profit ruling scheme ... Read more

Flir Systems Inc, a global leader in infrared Cameras, is involved in a SEK 2.8 billion transfer pricing dispute with the Swedish Tax Authorities. In a recent 10Q filings Flir Systems Inc. provides information on the dispute: “…the United States Internal Revenue Service (“IRS”) and other tax authorities regularly examine our income tax returns. Our financial condition and results of operations could be adversely impacted if any assessments resulting from the examination of our income tax returns by the IRS or other taxing authorities are not resolved in our favor. For example, during the quarter ending September 30, 2018, the Swedish Tax Authority (“STA”) issued a proposed tax assessment for the tax year ending December 31, 2012 to one of the Company’s non-operating subsidiaries in Sweden. The proposed assessment concerns the use of tax credits applied against capital gains pursuant to European Union Council Directive 2009/133/EC, commonly referred to as the EU Merger Directive, and indicates a suggested decision to ... Read more

New Oxfam research shows that four pharmaceutical corporations — Abbott, Johnson & Johnson, Merck, and Pfizer — systematically allocate super profits in overseas tax havens. In eight advanced economies, pharmaceutical profits averaged 7 percent, while in seven developing countries they averaged 5 percent. In comparison, profits margins averaged 31 percent in countries with low or no corporate tax rates – Belgium, Ireland, Netherlands and Singapore. The report exposes how pharmaceutical corporations uses sophisticated tax planning to avoid taxes ... Read more

Since June 2013, the European Commission has been investigating tax ruling practices of EU Member States. A Task Force was set up in summer 2013 to follow up on allegations of favourable tax treatment of certain companies, in particular in the form of unilateral tax rulings. The Treaty on the Functioning of the European Union (“TFEU”) provides that “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.”. The State aid rules ensures that the functioning of the internal market is not distorted by anticompetitive behavior favouring some to the detriment of others. In June 2014 the Commission initiated a series of State aid investigations on Multinational Corporations related to transfer pricing practices and rulings. Final decisions now have been published ... Read more

A Dutch zinc smelting company was gradually restructured after 2003, transferring key functions to related group entities and ultimately converting to a toll manufacturer under 'Project X' in 2009. The Dutch tax authority challenged both the compensation paid for the restructuring and the post-restructuring manufacturing remuneration. The Rechtbank Zeeland-West-Brabant ruled in favour of the taxpayer in September 2017 ... Read more

A Belgian subsidiary paid interest to its Dutch parent company acting as director. Belgian tax authorities reclassified part of the interest as taxable dividends under rules that only applied to foreign-resident directors. The European Court of Justice ruled in 2008 that this difference in treatment between domestic and cross-border situations violated the freedom of establishment under Articles 43 and 48 EC ... Read more