By Tom Fairless
BRUSSELS--A high-profile European Union investigation into
alleged tax sweeteners for multinationals spread to a fourth
country on Tuesday, in a sign of the growing momentum behind the
bloc's clampdown on corporate tax avoidance.
EU regulators said they had opened a formal probe into whether
the tax code in Belgium gives an unfair tax break to multinational
groups that isn't available to other firms.
Margrethe Vestager, the EU's antitrust czar, said that the
Belgian tax scheme may constitute "a serious distortion of
competition unduly benefiting a selected number of
multinationals."
The EU's tax probes have already ensnared four multinationals in
three European countries-- Apple Inc. in Ireland, Amazon.com Inc.
and Fiat SpA in Luxembourg and Starbucks Corp. in the Netherlands.
The companies could face back-tax demands worth hundreds of
millions of dollars if regulators' suspicions are confirmed. All
companies have denied receiving special treatment.
The investigation has focused on tax rulings, which are used to
confirm the size of companies' future tax bills, in order to give
certainty as to future outgoings. The European Commission, the
bloc's Brussels-based executive arm, suspects some tax rulings may
have granted certain companies an advantage over others, which
would be illegal under EU law.
This time, the concerns center on a provision in Belgian tax law
that allows companies to deduct so-called "excess profits" from
their tax bills. These are profits that result from the advantage
of being part of a multinational group.
"The Belgian 'excess profit' tax system appears to grant
substantial tax reductions only to certain multinational companies
that would not be available to stand-alone companies," Ms/ Vestager
said.
The commission said in December it would ask all 28 EU
governments to provide a full list of companies that received an
advance tax ruling between 2010 and 2013.
Write to Tom Fairless at tom.fairless@wsj.com
Access Investor Kit for Amazon.com, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0231351067
Access Investor Kit for Apple, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005
Access Investor Kit for Starbucks Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8552441094
Subscribe to WSJ: http://online.wsj.com?mod=djnwires