Court win for EU regulators in crackdown on $825 million Belgium tax scheme

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LUXEMBOURG, Sept 16 (Reuters) – Belgium on Thursday lost its fight against an EU regulatory ruling that tax breaks granted to Magnetrol, BP and more than 30 other multinationals constituted an illegal aid scheme after Europe’s top court backed competition enforcers.

The ruling by the EU Court of Justice (CJEU) is a win for the European Commission, which to date has won three cases at the lower tribunal but lost two, including its order to iPhone maker Apple to pay 13 billion euros ($15.3 billion) in Irish back taxes which was dismissed by the tribunal last year.

The EU enforcer in its 2016 decision ordered Belgium to recover some 700 million euros from companies which benefited from the scheme. These included U.S. manufacturer Magnetrol, oil major BP, chemical producer BASF, Wabco, Cellio, Atlas Copco and Belgacom now Proximus.

The EU competition watchdog said the series of tax rulings given to the companies constituted an aid scheme. The move was part of a crackdown by Commission Vice-President Margrethe Vestager against sweetheart deals between EU countries and multinationals.

The CJEU agreed with the Commission’s arguments, saying that the General Court had made several legal errors.

“The Commission correctly found that there was an aid scheme,” judges said.

Judges referred the case back to the lower tribunal, which in 2019 annulled the European Commission’s 2016 decision.

The case is C-337/19 P Commission v Belgium and Magnetrol International.

(FILE) – A general view of the entrance of the Court of Justice of European Union (CJEU) in Luxembourg. EPA-EFE/JULIEN WARNAND

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