EU Judgment in Case T-131/16 RENV Belgium v Commission and Case T-263/16 RENV Magnetrol International v Commission

Wednesday 20th September 2023

General Court

Judgment in Case T-131/16 RENV Belgium v Commission and Case T-263/16 RENV Magnetrol International v Commission

(Fiscal policy)

Since 2005, Belgium has applied a tax regime that exempts certain excess profits of Belgian entities that are part of multinational groups of companies. These entities can benefit from a ruling from the Belgian tax authorities, particularly if they establish their headquarters in Belgium and create jobs or invest there. In this context, “excess” profits, i.e. those that exceed the profits that comparable autonomous entities would have made in similar circumstances, are exempt from corporation tax.

In 2016, the European Commission found that this exemption system constituted an illegal state aid scheme that was incompatible with the internal market. It ordered the recovery of the aid granted from 55 beneficiaries, including Magnetrol International.

On 14 February 2019, at the request of Belgium and Magnetrol International e.a., the General Court of the European Union annulled the Commission’s decision. However, on 16 September 2021, on appeal, the Court of Justice set aside the judgment of the General Court, holding that the Commission had correctly established the existence of an aid scheme. The Court referred the case back to the General Court to assess the legality of the aid scheme in question.

Background Documents T-131/16 RENV 

Background Documents T-263/16 RENV