15 June 2016

On 11 January 2016, the European Commission adopted a decision prohibiting the so-called "excess profit exemption" aid scheme. According to the Commission, Belgium had granted aid to multinational companies by determining their Belgian taxable income on the basis of an erroneous application of the arm's length principle.

On 22 March 2016, the Belgian government applied to the EU General Court for the annulment of the Commission decision. In addition, numerous companies that had been recipients of "advance rulings" (in which the Belgian tax administration confirmed that certain "excess profits" were not part of taxable income) will also be bringing actions for the annulment of the decision.

The Belgian government also requested the General Court to suspend the Commission decision until the Court has ruled on the legality of the decision. Should the request for interim measures be dismissed, then the Belgian government will have to implement the decision, which includes the recovery of allegedly "unlawful aid" from companies that were issued with an advance "excess profits" ruling. Such recovery is expected to occur on the basis of supplemental tax assessments. Since the Commission decision requires Belgium to recover all aid that was granted during the past ten years, and since supplemental tax assessments can only be made for the last three taxable years, it is likely that the Belgian Parliament will be asked to pass a special law, enabling supplemental assessments for earlier taxable years.

Eubelius is working with several recipients of "excess profit" rulings in order to protect their rights in the best possible way.