European Commission widens tax probe to Belgium

Investigation to focus on ‘excess profit’ tax rulings

The European Commission extended its tax probe to Belgium today , as it launched an in-depth investigation into a Belgian tax provision which allows companies to cut their corporate tax bill.

Competition Commissioner Margrethe Vestager said she was launching the investigation into so-called "excess profit" tax rulings, which allow companies to reduce their corporate tax liability due to "excess profits" they claim are the result of being part of a multinational group.

“We have a suspicion that it goes against EU state aid rules,” commissioner Vestager said.

“These are tax rulings that multinationals can benefit from, but that stand alone businesses can not benefit from, and other Belgian groups cannot benefit from either. There seems to be allowing a few multinationals to pay only taxes, or very few taxes, on part of their profits without any valid justification under taxation principles. “


The launch of a probe into Belgian tax rulings brings to five the number of state-aid investigations being undertaken by the European Commission on the issue of corporate tax. The commission is due to rule on its investigation into Apple's tax deal with Ireland before the summer.

Ms Vestager declined to comment on how many companies were involved in the Belgian tax probe, though she said it was less than .

The widening of the Commission’s tax investigations comes ahead of a meeting of the European Parliament’s conference of presidents on Thursday which will consider whether to establish a committee of inquiry into tax evasion.

Last month, the Green group in the European Parliament garnered the requisite support of 25 per cent of MEPs to call for the establishment of an enquiry. Welcoming the announcement of the European Commission's probe into Belgian tax rulings, Philippe Lamberts, a Belgian MEP and co-president of the Green group said that a committee of inquiry was "both legally possible and politically essential."

“ It is now a question of political will and we would strongly urge the European Parliament’s president and the leaders of the EP’s political groups to politically commit to an inquiry committee,” he said.

Suzanne Lynch

Suzanne Lynch

Suzanne Lynch, a former Irish Times journalist, was Washington correspondent and, before that, Europe correspondent