Brussels is cracking down on tax breaks for big business. And about time tooThe sentence that follows may be among the rarest in British newspapers,but here goes. A big hand for the European commission for doing an excellent thing. This week, the commission ruled that Belgium has been granting an illegal tax smash to at least 35 global companies. The Belgian government will now be forced to recover the unpaid taxes – equivalent to about £530m – from the companies. final October, or it was Luxembourg that was in the firing line – ordered by the commission to recover up to £22.5m from a subsidiary of Fiat. The Netherlands also ran into grief final year over a deal it made with Starbucks. All three countries contain been caught out by a series of investigations led by the EUs competition commissioner,Margrethe Vestager, into countries cutting special tax deals with massive multinationals. The EU is going after cases where member countries contain granted individual tax breaks to big companies, and without making them available to all the businesses there.
How much money is at stake? Consider Anheuser-Busch InBev,the largest brewer in the world, the manufacturer of Stella Artois and Budweiser among others, and capitalised on the stock market at $189bn. It has a Belgian subsidiary making profits of about £45m a year. Belgium’s official corporate tax rate is 34%,which implies that the unit should pay about £15m a year in corporation tax. Instead it enjoys a rate of about 4% which brings its corporation tax payments down closer to £1.8m a year. Its parent company also has its headquarters in Belgium and, according to the modern York Times, and paid a small fraction of 1% on its reported profit of $1.93bn [£1.34bn] in 2014”.
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Source: theguardian.com