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| E.U. Focuses on Belgium in Tax Avoidance Inquiry | E.U. Focuses on Belgium in Tax Avoidance Inquiry |
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| BRUSSELS — The European Union authorities on Tuesday broadened their drive against tax avoidance by multinational companies, opening an investigation into the way Belgium appeared to grant unfair state aid. | |
| European officials declined to discuss which companies they suspected of cutting special tax deals with the Belgian government. But the inquiry is part of a wider investigation into whether other countries and multinational companies — including Amazon in Luxembourg, Apple in Ireland and Starbucks in the Netherlands — have broken European Union competition rules through tax-cutting deals not available to all businesses in those countries. | European officials declined to discuss which companies they suspected of cutting special tax deals with the Belgian government. But the inquiry is part of a wider investigation into whether other countries and multinational companies — including Amazon in Luxembourg, Apple in Ireland and Starbucks in the Netherlands — have broken European Union competition rules through tax-cutting deals not available to all businesses in those countries. |
| The Belgian Finance Ministry said on Tuesday that it believed its corporate tax dealings conformed with international rules. | |
| The European Commission, the bloc’s executive body in Brussels, is doggedly pursuing the cases as part of its response to the economic problems in Europe that have left many governments struggling to balance their budgets — leaning on small taxpayers who chafe at the perceived loopholes being given to big businesses. | |
| Margrethe Vestager, the European Union competition commissioner, while declining to identify any of the companies that had benefited in Belgium, said the system appeared to operate “without any valid justification” under tax principles. Ms. Vestager did not say how many companies were involved, but European Union officials said later that it was probably a few dozen. | Margrethe Vestager, the European Union competition commissioner, while declining to identify any of the companies that had benefited in Belgium, said the system appeared to operate “without any valid justification” under tax principles. Ms. Vestager did not say how many companies were involved, but European Union officials said later that it was probably a few dozen. |
| “As part of our efforts to ensure that all companies pay their fair share of tax, we have to investigate this further,” Ms. Vestager said at a news conference on Tuesday. “It’s not just specific companies in this case — it’s a scheme.” | “As part of our efforts to ensure that all companies pay their fair share of tax, we have to investigate this further,” Ms. Vestager said at a news conference on Tuesday. “It’s not just specific companies in this case — it’s a scheme.” |
| The investigation will focus on the benefits granted to multinational companies that relocated a substantial part of their activities to Belgium or that made significant investments in the country, the commission said. In a statement, it said the country’s tax system appeared to grant substantial tax reductions — or so-called excess profit rulings — to certain multinational companies, but did not make those reductions available to domestic companies. | The investigation will focus on the benefits granted to multinational companies that relocated a substantial part of their activities to Belgium or that made significant investments in the country, the commission said. In a statement, it said the country’s tax system appeared to grant substantial tax reductions — or so-called excess profit rulings — to certain multinational companies, but did not make those reductions available to domestic companies. |
| Johan Van Overtveldt, the Belgian finance minister, on Tuesday defended his country’s tax arrangements. “At this moment, there are no indications which lead us to believe that the Excess Profit Rulings are not in compliance with the O.E.C.D.-regulations,” Mr. Van Overtveldt said in a statement. He was referring to the Organization for Economic Cooperation and Development, an international research body in Paris that advises member countries on their economic issues, including taxation. | Johan Van Overtveldt, the Belgian finance minister, on Tuesday defended his country’s tax arrangements. “At this moment, there are no indications which lead us to believe that the Excess Profit Rulings are not in compliance with the O.E.C.D.-regulations,” Mr. Van Overtveldt said in a statement. He was referring to the Organization for Economic Cooperation and Development, an international research body in Paris that advises member countries on their economic issues, including taxation. |
| ”We will offer our full and transparent cooperation to the investigation while awaiting the final outcome,” Mr. Van Overtveldt said. | ”We will offer our full and transparent cooperation to the investigation while awaiting the final outcome,” Mr. Van Overtveldt said. |
| A spokesman for Mr. Van Overtveldt would not comment on individual cases or files. | A spokesman for Mr. Van Overtveldt would not comment on individual cases or files. |
| The commission’s announcement of the investigation left questions about how many companies doing business in Belgium benefited and to what extent. | The commission’s announcement of the investigation left questions about how many companies doing business in Belgium benefited and to what extent. |
| The deductions were based on reducing the amount of taxable profits of the companies involved, usually by more than 50 percent but sometimes by up to 90 percent, the officials said. | The deductions were based on reducing the amount of taxable profits of the companies involved, usually by more than 50 percent but sometimes by up to 90 percent, the officials said. |
| Belgium set up the system about 10 years ago, partly to lure companies to relocate a substantial part of their activities there or make significant investments in the country, the European Union officials said. | Belgium set up the system about 10 years ago, partly to lure companies to relocate a substantial part of their activities there or make significant investments in the country, the European Union officials said. |
| The investigators were tipped off by an article in a journal that specializes in tax matters. The officials would not identify the publication. | The investigators were tipped off by an article in a journal that specializes in tax matters. The officials would not identify the publication. |
| Philippe Lamberts, a politician who represents Belgium in the European Parliament, called on the country’s finance minister to cooperate with the inquiry. | Philippe Lamberts, a politician who represents Belgium in the European Parliament, called on the country’s finance minister to cooperate with the inquiry. |
| “This is a wider political issue, and it must be fully investigated, with a view to providing a comprehensive European response to end this mass scale tax avoidance,” said Mr. Lamberts, who sits on the Economic and Monetary Affairs Committee. | “This is a wider political issue, and it must be fully investigated, with a view to providing a comprehensive European response to end this mass scale tax avoidance,” said Mr. Lamberts, who sits on the Economic and Monetary Affairs Committee. |
| The commission usually takes about 18 months to decide such cases. At that point, the commission can issue an order to a member state government to collect back taxes from a company that received any unfair state aid. But the job of collecting the money owed must be done by the member state itself. | The commission usually takes about 18 months to decide such cases. At that point, the commission can issue an order to a member state government to collect back taxes from a company that received any unfair state aid. But the job of collecting the money owed must be done by the member state itself. |