Tax Rulings and state aid: an update
On 19 September 2016, the Commission opened another in-depth investigation in a tax-related matter, namely into Luxembourg’s tax treatment of the GDT Suez Group (now Engie). The Commission is concerned that several tax rulings may have given GDF Suez an unfair advantage over other companies, in breach of EU state aid rules. The tax rulings appear to treat the same financial transaction between companies of GDF Suez in an inconsistent way, both as debt and as equity. This treatment appears to give rise to double non-taxation on profits arising in Luxembourg. Meanwhile, more and more companies are appealing the Commission decision concerning the Belgian ‘excess profit’ tax scheme. The following multinationals lodged an appeal: AB InBev, Capsugel Belgium, Atlas Copco Airpower, Soudal, Capsugel, Siemens Industry Software, Ontext, Ansell Healthcare Europe, Esko-Graphics, Trane, BASF, Belgacom, VF, Zoetis, and Punch Powertrain. Belgium also lodged an appeal against the Commission decision and applied for interim measures to suspend the recovery of the tax reliefs. In July 2016, the General Court dismissed the application for interim measures. Belgium was not able to demonstrate an accurate and comprehensive picture of the economic situation to justify the interim measures. Belgium must, therefore, start the recovery of the illegal state aid while the appeal against the Commission decision is pending. Read more.
Prohibition on advertising of high risk financial instruments
Recently, the minister of Finance of the Netherlands indicated that he aims for a prohibition on advertising of certain high risk financial instruments such as CFDs and binary options. A similar prohibition exists or is expected to apply in other jurisdictions such as Belgium and France. The minister’s proposal was a result of questions asked in the Dutch Parliament. The Netherlands Authority for the Financial Markets (AFM) recently warned investors as well about these products, following a recent warning and study by The European Securities and Markets Authority (ESMA). The AFM furthermore tried to deny a license to an investment firm on the grounds that the binary options its services would relate to, are inherently dangerous and not in the best interest of clients. However, the administrative high court objected to the denial of the license by the AFM. At present, the Ministry of Finance and the AFM are studying the suggested prohibition and the financial instruments it should relate to.
Compliments of Houthoff and Buruma – a member of the EACCNY