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THE European Union yesterday closed a major tax break that Belgium offered to multinationals, reportedly including beer giant AB InBev and British American Tobacco, and ordered the companies to return 700 million euros (US$762 million) in unpaid taxes.
In the latest Brussels crackdown on tax avoidance, it ruled that the benefit to some 35 multinational companies was illegal and breached the EU’s rules on state aid to companies. It comes in the wake of the “Luxleaks” scandal, which revealed details of tax breaks given to dozens of major firms in Luxembourg when current European Commission head Jean-Claude Juncker was prime minister.“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,” Competition Commissioner Margrethe Vestager told a news conference.
She did not name the companies but reports said targets included Stella Artois brewer AB InBev which is undergoing a US$121 billion buyout of rival SABMiller. Seeing AB InBev use the tie-up as an opportunity to leave Belgium for lighter taxes elsewhere has been a major concern in Brussels.
The EU has also launched investigations into other countries’ tax deals: US tech giant Apple’s deals with Ireland, coffee-shop chain Starbucks with the Netherlands and McDonald’s with Luxembourg. In October, the commission decided that Luxembourg and the Netherlands have granted unfair tax advantages to Fiat and Starbucks, respectively, and ordered the firms to repay some taxes.
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