Belgium tax break for BP, others, upheld by EU court

LUXEMBOURG/BRUSSELS (Reuters) - BP, BASF and more than 30 other multinationals stand to benefit after EU judges overturned an order demanding Belgium revoke a tax break.

Night shot of illuminated city business district in Brussels, Belgium August 13, 2017. REUTERS/Eric Vidal

The European Commission failed to prove that the Belgian tax break constituted aid, said the ruling by the General Court, the lower branch of the Court of Justice in Luxembourg.

“The Commission wrongly considered that the Belgian system relating to the excess profit of multinational companies constituted an aid scheme,” it said.

The ruling marks a setback for the EU’s crackdown on tax avoidance by multinationals, a drive led by Competition Commissioner Margrethe Vestager.

The European Commission in 2016 had ordered Belgium to recover some 700 million euros ($789 million) from companies which benefited from the scheme.

In addition to BP and BASF, Wabco, Cellio, Atlas Copco and Belgacom (now Proximus) benefited from the tax break.

Belgium and U.S. manufacturer Magnetrol had challenged the Commission in cases filed with the General Court.

It’s possible that the Commission will now pursue individual cases in the Belgian tax break case, according to one lawyer.

“The Commission can take a new decision qualifying each individual case,” said Jacques Derenne, a partner at law firm Sheppard Mullin.

Elsewhere the European Commission’s crackdown on large companies avoiding tax has seen it order Ireland to recover some 13 billion euros from iPhone maker Apple.

Luxembourg was instructed to claw back 250 million euros from Amazon, about 120 million euros from France’s Engie and up to 30 million euros from Fiat Chrysler.

The Netherlands has been instructed to recover 20-30 million euros from Starbucks.

Reporting by Francois Aulner in Luxembourg and Foo Yun Chee in Brussels; editing by Jason Neely