EU orders recovery of US$760 million in illegal tax breaks from 35 multinationals

BRUSSELS -- The European Union has ordered Belgium to recover some $760 million in illegal tax breaks from 35 multinationals, its latest ruling against the sweet deals many member states offered to some of the world's biggest companies.

See Full Article

EU Competition Commissioner Margrethe Vestager said Monday the tax advantage given to a select group of mainly European companies "distorts competition" by putting smaller competitors "on an unequal footing."

"National tax authorities cannot give any company, however large, however powerful an unfair competitive advantage compared to others," Vestager said. "This scheme puts smaller competitors at an unfair disadvantage."

Belgian Finance Minister Johan Van Overtveldt said he could still appeal the decision before the EU's high court depending on negotiations on how to claw back the taxes. "The consequences for the companies involved could be major, and the recovery extremely complex," he said.

Since the EU ruled on a government taxation system instead of deals with specific companies, it did not name any multinational involved beyond noting that they were mainly European.

Under the system, Vestager said multinationals did not have to pay taxes on more than 50 per cent of their actual profits. Sometimes it went as high as 90 per cent.

"We know of no other scheme similar to this, probably that was one reason it was named 'only in Belgium'," Vestager said.

The disclosure that multinationals have benefited from huge tax breaks across Europe has become a big political issue at a time when many governments have been raising taxes on their citizens in an attempt to balance the books.

Over the past months, Vestager's office has gone after several member states, including the Netherlands and Luxembourg and targeted companies like Fiat and Starbucks. It has three more tax probes ongoing, centring on U.S. companies like Apple, Amazon and McDonald's.

Vesteger has faced criticism that she has unduly focused on U.S. companies. On Monday, she denied that the latest ruling was part of a balancing act.

"I, of course, hear the criticism that this is about US companies, which it is obviously not," Vestager said.


Latest Economic News

  • After overcharging for bread, should Loblaws demand ID for a $25 gift card?

    Economic CBC News
    Jenn Iskiw says she'll be grocery shopping elsewhere after feeling betrayed by Loblaws — twice. First, for artificially inflating the price of bread for 14 years, and second, for demanding she send ID to get a $25 gift card offered as compensation for bread price fixing. Source
  • Facebook suspends data analytics firm that worked for Trump campaign

    Economic CBC News
    The Massachusetts attorney general said on Saturday her office was launching an investigation after reports that Cambridge Analytica had harvested private information from more than 50 million Facebook users in developing techniques to support U.S. President Donald Trump's 2016 election campaign. Source
  • Trump's goal of 'energy dominance' could change the global balance of power

    Economic CBC News
    Fuelled by technological breakthroughs and cuts to taxes and regulation, the United States is on target to become the world's biggest producer of crude oil in the next five years. Let that sink in. The U.S will be bigger than Russia and Saudi Arabia. Source
  • How to avoid spending money on unnecessary oil changes

    Economic CBC News
    Oil changes are by far the most common service performed on vehicles in Canada. Customers pay quick lube facilities, private garages and dealer maintenance centres well over a billion dollars a year for the service. But a CBC investigation finds many of us may be changing our oil far more often than automakers require. Source
  • Trans Mountain protester arrested, one day after court grants injunction

    Economic CTV News
    BURNABY, B.C. -- Burnaby RCMP say they arrested a woman who chained herself to a work truck Friday morning, one day after the B.C. Supreme Court granted Trans Mountain an injunction against demonstrators. Just before 8 a.m. Source
  • Enbridge, TransCanada shares flat after steep dive due to U.S. tax ruling

    Economic CTV News
    CALGARY -- Shares in Canadian pipeline companies Enbridge Inc. and TransCanada Corp. failed to recover fully Friday from a steep sell-off on Thursday after the U.S. said it would eliminate a tax break for owners of certain interstate pipelines. Source
  • WestJet union drive helped by unhappiness with pay formula, says flight attendant

    Economic CTV News
    MONTREAL -- A WestJet flight attendant says rules that effectively pay starting workers less than minimum wage because they're compensated only for time in the air is helping shore up support for a union drive at Canada's second-largest airline. Source
  • Sask. premier blasts 'mind-boggling' rail backlog of grain shipments

    Economic CTV News
    REGINA -- Saskatchewan Premier Scott Moe says it's mind-boggling that grain shipments have been delayed again by rail backlogs this year. Moe told the Saskatchewan Association of Rural Municipalities on Friday that this is the second time in four years that grain shipments have been delayed. Source
  • Canadian CEO charged with conspiring to sell unhackable phones to criminals

    Economic CTV News
    TORONTO - The United States has arrested the chief executive of Phantom Secure, a Canadian privacy and security firm, alleging the Vancouver-area resident has conspired to provide drug traffickers with modified BlackBerry smartphones to evade law enforcement. Source
  • $1.6B contract one of three awarded for Site C dam in northeastern B.C.

    Economic CTV News
    VANCOUVER - A $1.6 billion contract has been awarded for construction of the Site C hydroelectric dam in northeastern British Columbia, just three months after the province's NDP government reluctantly allowed the megaproject to continue. Source