European Union competition chief Margrethe Vestager has had mixed fortunes getting European courts on side in her eight-year crusade against allegedly unfair tax deals doled out by countries such as Luxembourg, the Republic and the Netherlands to some of the world’s biggest multinationals.
But the Dane will have been heartened by an EU Court of Justice (CJEU) ruling on Thursday in her attempted crackdown on a €700 million tax scheme covering more than 30 major groups, including US manufacturer Magnetrol, UK oil major BP, German chemical producer BASF and the world’s largest brewer, Anheuser-Busch InBev.
The EU General Court, the second-highest court in the union, moved two years ago to annul the commission decision that Belgium’s practice of giving tax breaks to the group of companies amounted to a “systemic approach” or a “scheme”.
The CJEU judges ruled on Thursday that Vestager was correct in calling it an aid scheme and that a sample of 22 tax rulings out of a total of 66 was enough to show that the Belgian tax authorities had taken a systemic approach.
The backing of the EU’s top court may embolden Vestager as she continues with an appeal against a General Court decision last year that her team was wrong to order Apple in 2016 to pay €14.3 billion of allegedly illegal back taxes and interest. (The lower court ruled, it will be remembered, that the commission “did not succeed in showing the requisite legal standard” that the iPhone maker’s tax arrangements in the Republic amounted to illegal benefits from the State).
But the Belgian case must now go back to the General Court, which still has to rule on the more significant issue of whether the country gave the companies a “select advantage”, amounting to state aid.
Meanwhile, it could be up to two years before the CJEU delivers its judgement on Apple, by far the biggest case Vestager has pursued. In the meantime, she’ll take whatever minor legal victories she can eke out elsewhere.