On 29 December 2016, the Programme Law of 25 December 2016 (Programmawet van 25 december 2016/Loi-programme du 25 décembre 2016 – the "Programme Law") was published in the Belgian Official Journal (Belgisch Staatsblad/Moniteur Belge). The Programme Law provides for a regulatory framework for the recovery of the state aid granted by Belgium to a group of multinational companies through the so-called "Excess Profit" tax scheme.

Under this tax scheme, multinational companies could obtain a binding tax ruling from the Belgian tax authorities allowing them to reduce their corporate tax base by 50%-90% to discount for so-called "excess profits", i.e., the alleged difference in profits between the actual recorded profits of a multinational compared with the hypothetical average profits of a stand-alone company in a comparable situation.

On 11 January 2016, the European Commission (the "Commission") qualified the "Excess Profit" tax scheme as illegal state aid (See VBB on Belgian Business Law, Volume 2016, No. 1, p. 21 and Volume 2016, No. 5, p. 17, available at www.vbb.com). Consequently, the Commission ordered the Belgian state to recover the aid.

Unpersuaded by the Commission's reasoning, on 22 March 2016 Belgium filed an appeal against the decision before the European General Court (the "General Court"). Several beneficiaries of the tax advantages equally appealed the decision. As such appeal did not suspend its obligation to recover the tax advantages, Belgium requested the General Court to suspend the operation of the contested decision until the General Court delivered its judgment on the main action. The General Court dismissed this application on 19 July 2016, holding that the suspension of the recovery of the alleged state aid was not justified because Belgium had failed to establish urgency.

Since Belgium was obliged to give immediate effect to the Commission's decision of 11 January 2016, Parliament adopted the Programme Law which stipulates that the alleged state aid corresponds to the amount of taxes that was not collected as a result of the application of the "Excess Profit" tax scheme, increased with the compound interest calculated from the moment the aid was granted until the actual repayment of the aid. Such amounts will be entered in the assessment register on an annual basis through tax assessments. Moreover, the amount of recovered aid will be determined per taxable period for each taxable period starting from the first grant of the aid until the tax period associated with the tax year 2015.

Interestingly, the Programme Law explicitly provides that the recovered tax advantages will be returned to the beneficiaries within a period of twelve months if the Commission's decision of 11 January 2016 is annulled by a final judgment of the General Court or the Court of Justice of the European Union.

The provisions of the Programme Law relating to the recovery of the aid entered into force on 29 December 2016.

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