EU’s Crackdown on Belgian Tax Breaks Gets Top Court Boost

(Bloomberg) --

Margrethe Vestager, the European Union’s antitrust chief, got a belated boost in her bid to force Belgium to claw back about 800 million euros ($942 million) in tax breaks from dozens of companies including Anheuser-BuschInBev NV.

The EU Court of Justice ruled on Thursday that the European Commission in 2016 “correctly found that there was an aid scheme.” Judges decided to send the case back to a lower EU tribunal for a re-examination.

Vestager has had a mixed record in court cases linked to her tax crackdown. Last year, she suffered her most stinging defeat to date when the EU’s lower court annulled her order for Apple Inc. to repay Ireland 13 billion euros. Crucially for the European Commission, judges have so far rejected arguments that the EU regulator is overstepping its powers in hunting down tax dodging.

In their initial challenge, Belgium and the companies accused the commission of misusing its powers by taking an “entirely novel” approach to state aid law and retroactively prohibiting EU nations’ tax practices. 

The EU’s lower court in 2019 annulled the commission’s first decision in the Belgian case, saying it should have looked at each company’s tax break on its own merits rather than as a group. The commission in 2019 opened a new probe that is still pending, this time into Belgian tax deals for 39 companies.

The EU watchdog said it “will carefully study today’s judgment and assess its implications including on the 39 formal investigations it opened in September 2019 into the individual ‘excess profit’ rulings,” according to an emailed statement. 

Belgium’s finance ministry said it’s also carefully studying the judgment to determine the next steps.

The case is: C‑337/19 P, European Commission v. Kingdom of Belgium and Magnetrol International.

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