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EU: Tax ruling may force companies to leave Belgium

 |  February 29, 2016

Some multinational companies operating in Belgium are considering shifting part of their business out of the country after the European Union declared a government tax scheme illegal and is requiring the companies to pay back hundreds of millions of euros in unpaid taxes.

The European Commission, the bloc’s antitrust watchdog, in January ordered Belgium to recoup about EUR700 million from some 35 companies after concluding that a Belgian tax-discount plan for multinationals was distorting competition within the EU’s single market.

But with the program overturned, some companies are considering whether to transfer part of their operations out of Belgium.

In an interview, the chief executive of Swedish industrial company Atlas Copco said the commission’s decision means the firm’s annual costs will rise by 4% to 5%. As a result, the corporation may consider relocating part of its activities in Belgium elsewhere, Chief Executive Ronnie Leten said.

“We prefer to enhance our competitiveness without touching our operations, but these limits may have been reached in Belgium,” Mr. Leten said.

Anheuser-Busch InBev NV, another company among the largest beneficiaries of the scheme, is also considering moving some its activities out of Belgium, partly because of the overturned tax program, a person familiar with the matter said.

Chief Executive Carlos Brito last week said the company planned to remain registered in Belgium even after the $108 billion merger with rival brewer SABMiller PLC closes. Still, it is too early to discuss where the merged company would put its headquarters, he said, adding that they would only decide shortly before the deal was completed.

Full Content: MarketWatch

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