http://www.dailymail.co.uk/news/article-3394337/British-American-Tobacco-Stella-Artois-35-companies-ordered-cough-35m-unpaid-taxes-Belgian-excess-profit-dodge-ruled-illegal.html
• Stella Artois among 35 companies ordered to pay more than half a billion pounds in unpaid taxes
• European Commission competition officials said Belgium had wrongly given tax breaks worth 700million euros (£524m)
• Instead of paying tax on their full profits, companies were taxed on hypothetical profits of smaller companies
The makers of Stella Artois and Benson & Hedges were last night among 35 companies ordered to stump up more than half a billion pounds in unpaid taxes after deals they had with the Belgian government were ruled illegal.
European Commission competition officials said Belgium had wrongly given tax breaks worth 700million euros (£524m) under a scheme that helped multinationals reduce their taxable profits by up to 90 per cent.
British American Tobacco, which makes Dunhill, Lucky Strike and Pall Mall, and brewer AB Inbev, whose brands include Budweiser, Corona and Beck’s, were named as among the companies that had benefited.
Competition Commissioner Margrethe Vestager said: ‘The European Commission has concluded that selective tax advantages granted by Belgium under its “excess profit” tax scheme are illegal under EU state aid rules.
‘Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules. It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing.’
Under the tax scheme, launched in 2005 with the tagline ‘Only in Belgium’, international companies were encouraged to invest in the country with the promise they could cut their tax bills.
Instead of paying tax on their full profits, companies were taxed on hypothetical profits of what it was estimated a smaller company without their international scale and global brand recognition would earn.
The EU tax investigation follows those looking at Apple’s deals with Ireland, coffee-shop chain Starbucks’s arrangements with The Netherlands and McDonald’s with Luxembourg.
In October, the Commission decided that Luxembourg and the Netherlands had granted unfair tax advantages to Fiat and Starbucks, respectively, and ordered the firms to repay some taxes.
EU rules say some tax breaks offered to big companies breach the bloc’s rules on state aid, as they amount to a government subsidy that is aimed at attracting multinationals to do business in certain countries.
Belgian finance minister Johan Van Overtveldt yesterday said: ‘At this point we do not exclude any option. This also applies to the possibility of an appeal against the decision.’
An AB Inbev spokesman said: ‘While we are disappointed by this decision, we remain confident that our tax rulings are in full compliance with the EU jurisprudence on state aid and that we have always complied with Belgian and international tax provisions.
‘We will consider our options, taking into account the reactions by the Belgian authorities.’
British American Tobacco did not respond to a request for comment.