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“The avoidance of tax may be lawful, but it is not yet a virtue .”

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News

ECJ Partly Annuls EU Decision on Belgian Coordination Centers


Date:
22 June 2006


In Belgium v. European Commission and Forum 187 ASBL v. European Commission (joined cases C-182/03 and C- 217/03) the Court of Justice of the European Communities has partly annulled Commission Decision 2003/757/EC, which required Belgium to close down its coordination centers, because the decision did not provide transitional measures. In European Commission v. EU Council (C-399/03) the Court has annulled Council Decision 2003/531/EC on Belgian state aid to some coordination centers because the EU Council could not validly adopt the decision.

Belgian coordination centres are used by multinationals to centralise their business activities and they enjoy a tax break in Belgium in that they are not liable to corporate income on their profits. They have come under scrutiny of the European Commission and will be wound down. The ECJ confirmed that the tax breaks contravene EU law, but it stated that it was inconsistent to take away the tax breaks from coordination centres that would lose their status before 2010, while it had been renewed on a 10-year basis.  Coordination centres can continue to benefit from tax incentives until 2010.

 

 

 


 

 

 

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