CFE’s Tax Top 5 – 2 October 2023

State Aid & Transfer Pricing: General Court Declares Belgian Excess Profit Scheme Unlawful 

The General Court of the EU has confirmed the European Commission’s assessment of its Decision in 2016 on the excess profit exemption State Aid scheme implemented by Belgium, where the Commission declared Belgium’s excess profit exemption scheme illegal and ordered recovery of around 700 million EUR from 35 multinational companies. Subsequently, the Court received 30 applications seeking annulment of the Commission’s findings (from Belgium and the aid beneficiaries). With a judgment of 14 February 2019 in cases T-131/16 and T-263/16, the General Court initially annulled the contested Commission decision. However, the Court of Justice of the EU (CJEU) set aside the General Court original judgment and referred the case back to the General Court with its judgment of 16 September 2021, Commission v. Belgium and Magnetrol (C-337/19 P). On 20 September 2023, following the CJEU judgment, the General Court dismissed the actions seeking annulment of the Commission decision on the excess profit rulings scheme and issued 10 judgments in 30 cases, confirming that the European Commission rightly concluded that excess profit rulings were illegal under EU law, and therefore declared State aid. 
The General Court, in the judgment pronounced by Judge Vesna Tomljenović (rapporteur), concluded that the European Commission did not err in stating that the excess profit exemption scheme derogated from ordinary Belgium corporate income tax system. Such a scheme was not available to all entities in a similar and factual situation in the light of the objective of the Belgian corporate income tax system, which was to tax the profits of all companies subject to tax in Belgium, the Court said. Furthermore, the Court did not find it necessary to examine the merits of Belgium’s arguments against the subsidiary line of reasoning regarding selectivity, namely that the tax rulings on excess profit rulings constitute a misapplication of the Arm’s Length Principle (ALP) and thus a deviation from the said principle, which forms a part of the Belgium reference system. 
Belgium, the aid beneficiaries, and Ireland as an intervening Member state in support of Belgium, have the right to appeal the judgment to the Court of Justice.

CFE Professional Affairs Conference: “Tax Adviser 2030: Evolution or Revolution for Tax Practice, Policy and Administration?”  

Last places are available for CFE’s 16th European Conference on Tax Advisers’ Professional Affairs Conference in Helsinki on 21 September, where we will discuss what is next for tax policy, the role of tax advisers, fairness in taxation in the aftermath of BEPS, and take stock of the EU/OECD anti-avoidance initiatives with the more prominent role of the UN in tax policy, as well as the constrains on the EU Commission to investigate tax planning practices with the ‘manifest error’ doctrine established by the ECJ in the Fiat case.

The conference will feature a keynote speech from Prof. Dr. Vesna Tomljenović, Judge at the General Court of the European Union (GC)/ Judge-rapporteur for the Apple case, as well as other prominent speakers from the EU, tax practice, governments, tax institutes and academia. 

Register here for the conference, organised by CFE Tax Advisers Europe and the Finland’s Association of Tax Consultants. The conference will be held in Helsinki, Finland, on Thursday 21 September 2023 from 10:00am to 16:00pm, on the topic of “Evolution or Revolution for Tax Practice, Policy and Administration”. Two conference panels of speakers will examine the evolution of fiscal systems, tax practice and tax administration, prompted by both policy developments at EU and international level, as well as tax avoidance, enforcement of EU law in relation to taxation and impact on the tax profession.

Further information concerning the conference and registration is available here

WU Global Tax Policy Centre Surveys on Multilateral Cooperative Compliance & Tax Control Frameworks

The Global Tax Policy Center at the Institute of Austrian and International Tax Law of WU, Vienna’s University of Economics and Business, chaired by Jeffrey Owens, are conducting two surveys of business and government in the context of the work they are doing on cooperative compliance. To gain a better understanding of the expectations, experiences and best practices of tax administrations and taxpayers in different countries, surveys are being developed in the areas of tax control frameworks, multilateral cooperative compliance and costs & benefits of cooperative compliance. The results of the surveys, combined with additional research, will form the basis for providing practical guidance in these areas for the benefit of tax administrations, taxpayers and society.

The first survey is on the use and design of Tax Control Frameworks by MNEs, aimed at governments with experience regarding tax control frameworks, companies that have implemented a tax control framework and academic institutions. The second is on views on a multilateral project related approach to cooperative compliance, aimed at governments with experience in national cooperative compliance and governments that are considering introducing cross-border dispute prevention and resolution programmes, companies that have experience in or are considering participating in national cooperative compliance programmes and cross-border dispute prevention programmes, as well as academic institutions. Input is welcomed by the Global Tax Policy Centre. Each survey takes about 30 minutes.

OECD Publishes Input Received Concerning Consultation on Amount B, Pillar 1 on Transfer Pricing  

Following publication of the agreed Outcome Statement in mid-July 2023, the OECD sought public comments on Amount B under Pillar One concerning the application of the arm’s length principle to in-country baseline marketing and distribution activities. The public consultation document outlined the design elements of Amount B and was released in order to obtain inputs from stakeholders on the technical aspects of Amount B.

The public comments received have now been published by the OECD.

Further work will be undertaken on the following aspects:

  • Ensuring an appropriate balance between a quantitative and qualitative approach in identifying baseline distribution activities;
  • The appropriateness of:
    • the pricing framework, including in light of the final agreement on scope;
    • the application of the framework to the wholesale distribution of digital goods;
    • country uplifts within geographic markets; and
    • the criteria to apply Amount B utilising a local database in certain jurisdictions.

UCLouvain Conference on Abuse of Law in European Taxation – 21 to 22 November 2023

The PwC Chair in Tax Law of the Catholic University of Louvain, the Max Planck Institute of Tax Law and Public Finance, the Tax Institute of the University of Liège with the support of the International Fiscal Association Belgian Branch are co-hosting a conference on the topic of “Abuse of Law in European Taxation: Divergence or Convergence of Concepts & Policites?” on 21 and 22 November 2023 in Brussels.

The fight against tax fraud and avoidance has become one of the main drivers of EU legislation and continues to influence the shaping of the case-law of the European Court of Justice in tax matters. The concept of abuse plays a key role in the interpretation of EU primary and secondary law and is even referred to in a number of provisions of EU tax legislation (harmonization directives, administrative cooperation and exchange of information). However, after almost 25 years of application by European and domestic courts and tax authorities, this apparently unifying function of the concept of abuse in tax matters raises a number of unresolved issues, creating significant legal uncertainty for taxpayers.

The conference will gather together academics, public officials and practitioners to discuss the most recent issues concerning the prohibition of abuse in tax matters, as regards the application of fundamental freedoms, the EU corporate tax directives, including the recent Pillar 2 directive and the Unshell directive proposal, VAT and customs, exchange of information,. The conference will also address the latest implications of the notion of abuse of law on corporate tax planning and tax competition among Member States in the context of the international initiatives aiming at curbing base erosion and profit shifting (BEPS) and improving global tax transparency (exchange of information).

Registration for the conference is possible here.



The selection of the remitted material has been prepared by:

Aleksandar Ivanovski & Brodie McIntosh