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Friday, 15 February 2019

State Aid Update: General Court annuls the Commission’s state aid decision concerning Belgium’s Excess Profit Rulings (EPR)

In the past Belgian entities could obtain an advance ruling from the Belgian tax authorities, confirming that profits regarded as being ‘excess’, in that they exceeded the profit that would have been made by comparable standalone entities operating in similar circumstances, were exempted from corporate income tax.

In 2016, the Commission found that these rulings constituted a prohibited state aid scheme that was incompatible with the internal market and ordered the recovery of the unlawful aid granted from approximately 30 beneficiaries (Decision (EU) 2016/1699 of 11 January 2016 on the excess profit exemption State aid scheme SA.37667).

In a judgment of 14 February 2019, the General Court annuls the Commission’s decision. According to the Court, the Commission erroneously considered that the EPR’s constituted an aid scheme, within the meaning of Article 1(d) of Council Regulation (EU) 2015/1589 of 13 July 2015.

The Commission has two months to appeal the Court’s judgment.

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