EU orders Belgium to recover $762M in back taxes

The European Commission demanded on Monday that Belgium recover some 700 million euros ($762.9 million) from 35 large companies in back taxes in its biggest blow to date to profit-shielding arrangements used by many multinationals.

The Commission, which rules on competition issues in the European Union, said Belgium's "excess profit" tax system was illegal as it was granted to a select number of multinationals, but not to smaller companies, and so distorting competition.

EU Headquarters in Brussels, Belgium.
Rachele Rossi | Flickr | Getty Images
EU Headquarters in Brussels, Belgium.

It said it could not name the companies involved.

It shows European Union's will to crack down on tax avoidance but has in recent years galvanised authorities into taking action to try to ensure that large companies pay a fair share of their profit in tax.

The Commission ruled in October that Starbucks Corp and Fiat Chrysler Automobiles NV benefited from illegal tax deals with the Dutch and Luxembourg authorities, ordering each country to recover 20-30 million euros in back taxes.

It is also investigating the tax arrangements of Amazon in Luxembourg and Apple in Ireland.

EU Competition Commissioner Margrethe Vestager said the Commission would continue its inquiries into tax practices across the 28-member European Union.