Belgium: Tax exemptions granted on certain “excess” profits constitute unlawful State aid (CJEU judgment)

Tax exemptions on certain “excess” profits granted by Belgium to companies forming part of multinational groups constitute unlawful aid

Tax exemptions granted on certain “excess” profits constitute unlawful State aid

The General Court of the Court of Justice of the European Union (CJEU) today issued a judgment that certain tax exemptions on certain “excess” profits granted by Belgium to companies forming part of multinational groups constitute unlawful aid.

The case is: Belgium v. Commission (T-131/16)


As explained in a release [PDF 122 KB] from the CJEU:

  • Since 2005, Belgium has exempted certain “excess” profits of Belgian entities that form part of multinational corporate groups, that is profits exceeding the profit that would have been made by comparable standalone entities operating in similar circumstances. Those entities have been able to obtain an advance ruling from the Belgian tax administration, in particular if they centralize activities, create employment, or make investments in Belgium.
  • In 2016, the European Commission (EC) found that that exemption system constituted a State aid scheme that was unlawful and incompatible with the internal market and ordered the recovery of the aid granted from 55 beneficiary companies.
  • Upon application by Belgium and several beneficiary companies, the General Court of the European Union annulled the EC’s decision on 14 February 2019.
  • On appeal, however, the Court of Justice set aside the judgment of the General Court on 16 September 2021, finding that the EC had correctly determined that there was an aid scheme.
  • The Court of Justice referred the case back to the General Court in order for the General Court to rule on the classification of that scheme as State aid within the meaning of Article 107 TFEU. 

General Court judgment

In its second decision in this case, the General Court today held that the EC was right to find that the Belgian tax scheme relating to excess profit infringes EU State aid rules.

  • The court rejected all of the arguments put forward by Belgium to challenge the EC’s decision, including with regard to the financing of the scheme at issue through State resources or the alleged failure to take into account the tax rules applicable in Belgium.
  • Furthermore, the court determined that the EC correctly concluded that that scheme was selective in that it differentiated between operators who were in a comparable factual and legal situation. Thus, the entities forming part of a multinational group that benefited from the excess profit exemption were treated differently from other entities subject to Belgian corporate income tax that did not benefit from it.
  • The court also confirmed the EC’s finding that the scheme at issue was selective because it was not open to companies that had decided not to make investments, centralize activities or create employment in Belgium. The scheme was also found to be selective because it was not open to undertakings that were part of a small group.  



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