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European Commission - Daily News

Daily News 11 / 01 / 2016

Brussels, 11 January 2016

State aid: Commission concludes Belgian "Excess Profit" tax scheme illegal; around €700 million to be recovered from 35 multinational companies

The European Commission has concluded that selective tax advantages granted by Belgium under its "excess profit" tax scheme are illegal under EU state aid rules. The scheme has benefitted at least 35 multinationals mainly from the EU, who must now return unpaid taxes to Belgium. The Belgian "excess profit" tax scheme, applicable since 2005, allowed certain multinational group companies to pay substantially less tax in Belgium on the basis of tax rulings. The scheme reduced the corporate tax base of the companies by between 50% and 90% to discount for so-called "excess profits" that allegedly result from being part of a multinational group. The Commission's in-depth investigation opened in February 2015 showed that the scheme derogated from normal practice under Belgian company tax rules and the so-called "arm's length principle". This is illegal under EU state aid rules. Commissioner Margrethe Vestager, in charge of competition policy, stated: "Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules. It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing. There are many legal ways for EU countries to subsidise investment and many good reasons to invest in the EU. However, if a country gives certain multinationals illegal tax benefits that allow them to avoid paying taxes on the majority of their actual profits, it seriously harms fair competition in the EU, ultimately at the expense of EU citizens". The Commission decision requires Belgium to stop applying the "excess profit" scheme also in the future. Moreover, in order to remove the unfair advantage the beneficiaries of the scheme have enjoyed and to restore fair competition, Belgium now has to recover the full unpaid tax from the at least 35 multinational companies that have benefitted from the illegal scheme. A full press release is available in EN, FR, DE and NL. (For more information: Lucía Caudet – Tel.: +32 229 56182; Yizhou Ren – Tel.: +32 229 94889)

 

Mergers: Commission clears acquisition of MRH by Lone Star

The European Commission has approved under the EU Merger Regulation the acquisition of MRH (GB) Limited of the United Kingdom by the Lone Star Group of the US.  Lone Star is a group of private equity funds that invests in real estate, equity, credit and other financial assets. MRH owns and operates retail motor fuel service stations in the UK and the Channel Islands. The companies' activities do not overlap. The Commission therefore concluded that the proposed acquisition would raise no competition concerns. The transaction was examined under the simplified merger review procedure. More information is available on the Commission's competition website, in the public case register under the case number M.7793. (For more information: Lucía Caudet – Tel.: +32 229 56182; Carolina Luna Gordo – Tel.: +32 229 68386)

 

Mergers: Commission clears joint venture between Saudi Aramco and Lanxess

The European Commission has approved under the EU Merger Regulation the creation of a joint venture between Aramco Overseas Company B.V. of the Netherlands, a subsidiary of Saudi Arabian Oil Company of Saudi Arabia, and Lanxess Deutschland GmbH of Germany.  Aramco is active in the international petrochemical industry. Lanxess is a specialty chemicals company with global activities. The joint venture will include Aramco's and Lanxess' activities in the synthetic rubber business. The Commission concluded that the proposed transaction would raise no competition concerns because several competitors will remain in the market after the transaction and it will not lead to a change of the market structure. The transaction was examined under the simplified merger review procedure. More information is available on the Commission's competition website, in the public case register under the case number M.7879.  (For more information: Lucía Caudet – Tel.: +32 229 56182; Carolina Luna Gordo – Tel.: +32 229 68386)

 

 

ANNOUNCEMENTS

 

First Vice-President Timmermans in Turkey for discussions on Joint Action Plan and speech on EU-Turkey relations

This morning, in Ankara, First Vice-President Timmermans is meeting with Minister for Foreign Affairs Mr Mevlut Cavusoglu , Minister for European Affairs Mr Volkan Bozkir and Justice Minister Mr Bekir Bosdag for discussions on the implementation of the EU-Turkey Joint Action Plan to address the refugee crisis. The First Vice-President will also speak with all Turkish ambassadors at their annual conference this afternoon, on the topic of the EU-Turkey partnership. The EU-Turkey Joint Action Plan was agreed on 15 October and activated by the EU-Turkey Summit on 29 November. The Commission proposed on 24 November a €3 billion Refugee Facility for Turkey, and on 15 December presented a Recommendation for a Voluntary Humanitarian Readmission Scheme with Turkey for Refugees from Syria. The Commission is now working with the Council and with the Turkish authorities to ensure that implementation of the Joint Action Plan is carried out swiftly and effectively. (For more information:Tove Ernst – Tel.: +32 229 86764; Tim McPhie – Tel.: +32 229 58602)


Vice-President Dombrovskis in the Netherlands

Vice-President Dombrovskis, responsible for Euro and Social Dialogue, is visiting the Netherlands today and tomorrow to discuss economic developments in the country. In The Hague, the Vice-President will meet Prime Minister Mark Rutte, Lodewijk Asscher, Deputy Prime Minister and Minister of Social Affairs and Employment, and Jeroen Dijsselbloem, Minister of Finance. He will also discuss economic, fiscal and labourmarket policies with members of the parliament, the Social and Economic Council. In Amsterdam, he will hold a discussion on deepening the Economic and Monetary Union with officials from the Central Bank, Central Planning Bureau, think tanks and academics. The visit is related to the European Semester process of economic policy coordination across the EU. (For more information: Vanessa Mock – Tel.: +32 229 56194; Annikky Lamp – Tel.: +32 229 56151)

MEX/16/43


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