4 Commission Decision (EU) 2016/1699 of 11 January 2016 on the excess profit exemption State aid scheme SA.37667 (2015/C) (ex 2015/NN) implemented by Belgium (OJ 2016 L 260, p. 61).
OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 26 March 2026 ( 1 )
Joined Cases C ‑ 737/23 P to C ‑ 742/23 P
Capsugel Belgium (C ‑ 737/23 P),
VF Europe BVBA (C ‑ 738/23 P),
Belgacom International Carrier Services (C ‑ 739/23 P),
Zoetis Belgium (C ‑ 740/23 P),
Ineos Aromatics Ltd, formerly BP Aromatics Ltd (C ‑ 741/23 P),
Eval Europe NV (C ‑ 742/23 P)
v
European Commission
( Appeals – State aid – Aid scheme implemented by the Kingdom of Belgium – Tax ruling – Excess profit exemption – Criterion of State-aid control in tax law – Unlawful administrative practice as aid )
I. Introduction
1. When assessing the practice of the tax authorities of a Member State under State-aid law, are the European Commission and the EU Courts bound by the Member State’s interpretation of a provision of national tax law where that interpretation is not consistent with the wording of the provision?
2. That question lies at the heart of the appeals brought by Capsugel Belgium, VF Europe BVBA, Belgacom International Carrier Services, Zoetis Belgium, Ineos Aromatics Ltd and Eval Europe NV (‘the appellants’) against the judgment of the General Court of 20 September 2023 ( 2 ) (‘the judgment under appeal’). The present appeals are part of a series of appeals on which I am likewise delivering Opinions today. ( 3 )
3. The judgment under appeal concerns the decision of the Commission of 11 January 2016 ( 4 ) (‘the decision at issue’), in which the Commission considered that the ‘excess profit exemption’ (‘the tax practice at issue’) implemented by the Belgian tax authorities from 2004 to 2014 constituted aid incompatible with the internal market. The tax practice at issue (sometimes also referred to as an excess profit tax ruling system) made it possible to reduce the taxable profit of companies in Belgium forming part of an international group through advance tax rulings (‘tax rulings’).
4. The Belgian tax authorities based that practice on a provision of Belgian tax law, namely Article 185(2)(b) of the Code des impôts sur les revenus 1992 (Income Tax Code 1992; ‘CIR 92’). According to its wording, it allows corporate profits to be adjusted in cases where they have been influenced by arrangements which do not comply with the arm’s length principle. The provision probably comes into play most frequently in cases of non-arm’s length transfer pricing. ( 5 ) Both the Commission, in the decision at issue, and the General Court, in the judgment under appeal, concluded that that tax practice constituted a derogation from the entire body of Belgian law on corporate income tax (as the reference framework).
5. The present appeals give the Court of Justice the opportunity to decide to what extent the Commission and the General Court are bound by the national interpretation of a provision when establishing what constitutes ‘normal’ national tax law as a reference framework for the assessment of compliance with State-aid law. In particular, that question arises here because the tax practice at issue, based on Article 185(2)(b) of CIR 92, is a well-established administrative practice in Belgium.
II. Legal framework
A. European Union law
6. The framework in EU law comprises Articles 107 and 108 TFEU.
B. Belgian law
7. In Belgium, the rules governing the taxation of income are codified in CIR 92. Under Article 1(1) of CIR 92, one of the forms of income taxation is a levy on the total income of resident companies, namely corporate income tax.
8. By means of the Law of 21 June 2004 amending CIR 92 and amending the Law of 24 December 2002, ( 6 ) Belgium introduced new schemes for cross-border transactions between group companies, which provided for profit adjustments in cases of non-arm’s length arrangements.
9. Article 185(2) of CIR 92 states:
‘For two companies that are part of a multinational group of associated companies and in respect of their reciprocal cross-border relationships:
(a) when two companies are in their commercial and financial relationships linked by conditions agreed upon or imposed on them which are different from those which would have been agreed upon between independent companies, the profit which – under those conditions – would have been made by one of the companies but is not because of those conditions, may be included in the profit of that company;
(b) when profit is included in the profit of one company which is already included in the profit of another company and the profit so included is profit which should have been made by that other company if the conditions agreed between the two companies had been those which would have been agreed between independent companies, the profit of the first company is adjusted in an appropriate manner.
The first subparagraph applies by way of advance ruling without prejudice to the application of the Convention on the elimination of double taxation.’
10. It is apparent from the explanatory memorandum to the law that the purpose of that provision is to apply the arm’s length principle in cross-border situations. ( 7 )
11. The position of the Belgian tax authorities on the interpretation of that provision is apparent from a circular of 4 July 2006, in which the explanatory memorandum to the law is essentially repeated. ( 8 ) In addition, the Belgian Minister for Finance has taken a position on the application of Article 185(2)(b) of CIR 92, in particular in response to several parliamentary questions. ( 9 )
III. Facts and proceedings to date
A. Background to the dispute
12. In the period from 2004 to 2014, the authority responsible for issuing tax rulings, by means of 66 such rulings issued on the basis of Article 185(2)(b) of CIR 92, reduced the amount of profit taxable in Belgium for 55 companies established in Belgium which belonged to multinational groups.
13. At the request of the taxpayers, the competent authority did not base its assessment on transfer prices determined by it, but compared the profits of the Belgian companies with the average profits of a comparable standalone company. ( 10 ) The result of that comparative analysis was a percentage expressing the divergence between the taxpayers’ actual profit and the hypothetical average profit of a standalone company. Profits corresponding to that percentage were not subject to tax in the following five years. At the request of the taxpayers, therefore, the nature and amount of the basis of assessment changed, in that it was no longer the profit actually realised (which, under Belgian tax law, reflects actual ability to pay) which served as the basis of assessment, but only a reduced amount of that profit. In that regard, it is perfectly reasonable to refer to taxation of a hypothetical average profit. ( 11 )
14. By the decision at issue, the Commission found that the profit reductions granted by the competent Belgian authority through that tax practice constituted State aid within the meaning of Article 107(1) TFEU which was incompatible with the internal market and which had been unlawfully implemented by Belgium, in breach of Article 108(3) TFEU.
15. Furthermore, the Commission ordered that the aid granted be recovered from the recipients, a definitive list of which was to be drawn up by Belgium at a later date. However, in the annex to the decision at issue, for informational purposes on the basis of information provided by Belgium, the Commission already lists 55 beneficiaries, including the appellants.
B. The proceedings before the General Court and the judgment under appeal
16. Between 27 May and 20 July 2016, the appellants brought actions for annulment of the decision at issue; those were registered as Cases T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16.
17. The appellants raised four pleas in law at first instance on the basis of almost identical applications. In essence, they challenged the Commission’s findings that the tax practice at issue constituted an aid scheme, the classification of the tax practice at issue as State aid, and its order for recovery, and they alleged misuse of powers by the Commission in the form of an encroachment on the tax jurisdiction of Belgium.
18. By decision dated 16 February 2018, the General Court, inter alia, stayed the proceedings in Cases T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16 – the cases giving rise to the judgment under appeal – pending final decision in Cases T‑131/16 and T‑263/16.
19. By its judgment of 14 February 2019 ( 12 ) in Cases T‑131/16 and T‑263/16, the General Court annulled the decision at issue, as the Commission had erroneously found that the practice constituted an aid scheme. Following an appeal brought by the Commission against that judgment, the Court of Justice delivered its judgment on 16 September 2021. ( 13 ) By that judgment, it set aside the judgment of the General Court, as the Commission’s finding of an aid scheme was not objectionable, and referred the case back to the General Court. In the first set of proceedings, the General Court had not yet examined whether the tax rulings constituted State aid and whether the recovery of that aid had been correctly ordered. The General Court was to rule on those points in the second set of proceedings. ( 14 )
20. On 26 April 2022, the General Court decided, in accordance with Article 71(3) of its Rules of Procedure, to resume the proceedings.
21. By the judgment under appeal, dated 20 September 2023, the General Court dismissed the actions.
IV. Proceedings before the Court of Justice
22. The appellants lodged the present appeals on 30 November 2023. They claim that the Court of Justice should:
- set aside the judgment under appeal;
- annul the decision at issue;
- in the alternative, refer the case back to the General Court;
- order the Commission to pay the costs of the present appeal proceedings and of the proceedings before the General Court.
23. The Commission contends that the Court of Justice should dismiss the appeals and order the appellants to pay the costs.
24. By decision of 18 January 2024, the President of the Court of Justice joined the appeals for the purposes of the written and oral procedure as well as for the purposes of the judgment.
25. All parties have submitted written observations to the Court. In accordance with Article 76(2) of the Rules of Procedure of the Court of Justice, the Court decided not to hold a hearing.
V. Legal assessment
26. The appellants raise four grounds in support of almost identical appeals. By their first two grounds of appeal, they allege errors of law on the part of the General Court in determining the reference framework (see Section A below). By the third ground of appeal, they allege that the General Court erred in law by finding there to have been an advantage (see Section B below). Lastly, they claim that the General Court erred in holding the tax practice at issue to be selective (see Section C below on the fourth ground of appeal).
A. The first two grounds of appeal: determination of the reference framework
27. By their first two grounds of appeal, the appellants complain that the General Court misinterpreted Belgian tax law and distorted the evidence submitted in that regard. They claim that, when determining the reference framework, the General Court failed to take account of the recognised practice for interpreting Article 185(2)(b) of CIR 92 in Belgium and erred in law in relying instead on its own interpretation of Belgian law (regarding the first ground of appeal, see point 32 et seq. below). The appellants claim that, contrary to the General Court’s findings, the evidence submitted shows that Article 185(2)(b) of CIR 92 allows the Belgian tax administration to make a unilateral profit adjustment in favour of the taxpayer (regarding the second ground of appeal, see points 57 and 58 below).
1. Determination of the reference framework as a condition for the examination of State aid
28. According to settled case-law of the Court, ( 15 ) classification as ‘State aid’ within the meaning of Article 107(1) TFEU requires that, first , there be intervention by the State or through State resources. Second , that intervention must be liable to affect trade between Member States. Third , it must confer a selective advantage on the beneficiary. Fourth, it must distort or threaten to distort competition.
29. The only issue in the present case is the question whether a selective advantage has been conferred. In accordance with settled case-law of the Court, ( 16 ) selectivity in tax measures must be determined in three stages. In the first stage , it is necessary to identify the ordinary or ‘normal’ tax regime which applies in the Member State concerned, in other words the reference framework. The second stage involves demonstrating, on the basis of that ordinary or ‘normal’ tax system, whether the tax measure at issue is a derogation from that ordinary system, in so far as it differentiates between operators which, in the light of the objective pursued by the ordinary system, are in a comparable factual and legal situation. Where a derogation from ‘normal taxation’ has been identified, the final stage is examining whether the derogation is justified.
2. Findings of the General Court
30. The General Court follows the line of argument adopted by the Commission in the decision at issue, according to which the tax practice at issue constitutes a derogation from Belgian tax law, which is the reference framework. ( 17 ) That practice, the General Court rules, is not prescribed in any of the provisions of CIR 92, nor can it, in particular, be justified on the basis of Article 185(2)(b) of CIR 92. The General Court emphasises that the Commission did not exclude from the reference framework Article 185(2)(b) of CIR 92 as such but rather its (unlawful) application. ( 18 )
31. The General Court holds that the Belgian tax authorities, by reducing profits through the tax rulings, systematically applied that provision contra legem . ( 19 ) First, it states, the wording of Article 185(2)(b) of CIR 92 indicates that the provision applies only if there is a cross-border relationship between two associated companies and if the profit to be adjusted is also ( 20 ) included in the profit of the other company and if the profit so included is profit which should have been made by that other company if it had conducted its transactions on an arm’s length basis. ( 21 ) Second, the practice of exempting from corporate income tax a percentage of profit as excess profit has no basis in the wording of the law. ( 22 )
3. Determination of the reference framework by the General Court
32. To determine whether the General Court’s findings are vitiated by any error of law, I shall first examine the appellants’ objection that the General Court erred in law in upholding the Commission’s determination of the reference framework by disregarding recognised practice for interpreting Article 185(2)(b) of CIR 92 in Belgium and relying instead on its own interpretation. To that end, I shall set out the limits within which the Commission and the EU Courts, when determining the reference framework (and hence the occurrence of a derogation from it) are bound by the Member State’s interpretation of a national tax provision (point 33 et seq. and point 38 et seq. below). ( 23 ) I shall then examine whether the General Court erred in law in applying that test and correctly judged that the tax practice at issue was not part of the reference framework (point 47 et seq. below).
(a) Principle: being bound by the Member State’s assessment when determining the reference framework
33. When determining the reference framework, the Commission and the EU Courts are bound, in principle, by the Member State’s configuration and interpretation of its national tax law. ( 24 ) The primary purpose of that binding effect of the national system is to safeguard the fiscal autonomy of Member States. It also reflects the principle of legality of taxation, which the Court of Justice has recognised as forming part of the legal order of the European Union as a general principle of law. ( 25 )
34. Consequently, the Court of Justice also rightly assumes that the Member States have a margin of discretion regarding aid schemes in the form of general tax laws and that the standard of review of the Commission and the EU Courts is correspondingly less stringent. ( 26 ) The Court has emphasised that, given the current state of harmonisation of EU tax law, the Member States are free to establish the system of taxation which they deem most appropriate. ( 27 ) That discretion enjoyed by the Member States extends to determining the characteristics constituting each tax and applies in particular to the implementation and configuration of the arm’s length principle for transactions between associated companies. ( 28 )
35. That is the sense in which the judgments of the Court of Justice in Commission v Amazon.com and Others and in Luxembourg and Others v Commission ( 29 ) must be understood. In the judgment in Luxembourg and Others v Commission , the Court of Justice stated that, when determining the reference framework, the Commission is, in principle, required to accept the interpretation of the relevant provisions of national law given by the Member State concerned, provided that that interpretation is compatible with the wording of those provisions. ( 30 ) In the judgment in Commission v Amazon.com and Others , the Court found, among other things, that the Commission had unlawfully applied the OECD Guidelines on transfer pricing without having demonstrated that they had been, wholly or in part, explicitly adopted in Luxembourg law. ( 31 )
36. Developing that case-law, in the judgment in Prezydent Miasta Mielca the Court emphasised the fiscal autonomy of the Member States, stating that, when determining the fundamental characteristics of a tax, Member States may legitimately pursue, in addition to a purely budgetary objective, one or more other objectives, which then likewise constitute part of the relevant reference framework. ( 32 ) For that reason, the Court regarded a general exemption from property tax for land forming part of railway infrastructure, where that infrastructure was made available to rail carriers, as part of the reference framework. ( 33 )
37. In that respect, the starting point of the appellants’ complaint is correct, namely that the reference framework must be determined, in principle, on the basis of the Member State’s configuration and interpretation of its tax law.
(b) Exception: manifestly inconsistent configuration or manifest application of the law contra legem
38. The limits of that discretion enjoyed by Member States when determining the reference framework are exceeded where the tax law is configured in a manifestly inconsistent manner (point 42 below) or where the national authorities manifestly apply the tax law contra legem , and hence inconsistently (point 43 et seq. below). The standard of review to be applied is limited to a mere plausibility check (point 39 et seq. below).
(1) Standard of review: the plausibility check
39. The Commission and the EU Courts confine themselves to a plausibility check when reviewing whether the national tax laws are configured in an inconsistent manner or whether the national tax laws are being applied contra legem . ( 34 )
40. That limitation to a plausibility check protects the Commission and the EU Courts, first, from having to interpret correctly 27 different tax regimes in detail and so possibly becoming ‘overburdened’ by the sheer volume of material. ( 35 ) Second, it ensures that the Commission does not become a de facto supreme inspector of taxes and that the EU Courts, by dint of reviewing the Commission’s decisions, do not become de facto supreme tax courts. The fact is that, where review is confined to plausibility, not every simple error of law in a tax assessment constitutes a derogation from the reference framework. Consequently, the Commission and the EU Courts need not review all such errors for lawfulness. ( 36 )
41. It is therefore only necessary to examine, at EU level, whether the national tax laws are configured in a manifestly inconsistent manner or whether their application by the national authorities is manifestly contra legem . That is the case where the configuration and application cannot be plausibly explained to a third party, such as the Commission or the EU Courts. ( 37 )
(2) Manifestly inconsistent configuration
42. The limits of the discretion enjoyed by the Member States to configure their tax systems are exceeded where Member States abuse their tax law to confer advantages on individual companies in circumvention of the law on State aid. ( 38 ) Such an abuse of fiscal autonomy may be assumed in the case of a manifestly inconsistent configuration of tax law. ( 39 ) In its recent case-law, therefore, the Court has held that a general tax ruling imposing a tax burden is contrary to EU law where it has been configured according to manifestly discriminatory parameters intended to circumvent EU law on State aid. ( 40 ) General differentiations within national tax law are therefore not part of the reference framework if they have no rational basis within the reference framework, in other words within national tax law. ( 41 )
(3) Manifest application of the law contra legem
43. The limits of the Member State’s discretion when determining the reference framework are also exceeded where the application of a national tax provision is manifestly at odds with its wording. Accordingly, where national authorities apply a tax provision in a manner which is manifestly at odds with its wording, the Commission and the EU Courts are not bound by that practice applying that provision when determining the reference framework.
44. In that case, the national authorities are essentially repudiating the ‘normal’ national tax law adopted by the national legislature in the exercise of its fiscal autonomy. One effect of the principle of legality of taxation ( 42 ) is that the fiscal autonomy of the Member States is exercised primarily by the national legislature. It follows that national law is the primary reference point for determining the reference framework. Although the national authorities’ application of the law is the main factor, in principle, in that process, if the application of a law is manifestly at odds with its wording, the wording of the law takes precedence when it comes to determining the reference framework.
45. Accordingly, the Court of Justice has stated in its recent case-law that, when determining the reference framework, the Commission is, in principle, required to accept the interpretation of the relevant provisions of national law given by the Member State concerned, ‘ provided that that interpretation is compatible with the wording of those provisions ’. ( 43 )
46. It therefore follows from fiscal autonomy, first, that the wording of the law constitutes the point of reference for the review of the reference framework. Second, the review of any derogation from the wording of the law is limited to a plausibility check. ( 44 )
(c) Application of the standard of review
47. If that standard is applied, it emerges that the General Court did not err in law by upholding the reference framework determined by the Commission, in that it did not hold Article 185(2)(b) of CIR 92, but rather its manifestly unlawful application, to be a derogation from the reference framework, namely Belgian law on corporate income tax.
(1) Whether Article 185(2)(b) of CIR 92 is manifestly inconsistent
48. Article 185(2)(b) of CIR 92 is not manifestly inconsistent. On the contrary, it fits coherently into the Belgian tax system by seeking to ensure appropriate taxation in each country. At the same time, economic double taxation can thus be avoided within a multinational group when adjustments are made for transactions entered into on non-arm’s length terms which have influenced profits (the provision probably comes into play most frequently in cases of transfer pricing adjustments). ( 45 )
49. According to its wording, Article 185(2)(a) and (b) of CIR 92 allows the competent authority, for example, to adjust for tax purposes the prices of cross-border transactions between two companies of a multinational group in accordance with the arm’s length principle. That means that, for transactions between two associated companies, a price is imputed for tax purposes which independent companies would have agreed between them. Article 185(2)(a) of CIR 92 allows the profit determined on the basis of that hypothetical price to be attributed to the ‘correct’ company for tax purposes. Conversely, Article 185(2)(b) of CIR 92, by adjusting the price in accordance with the arm’s length principle, serves to reduce the profit arising from the cross-border transaction if it is also included in the other company’s profits. In that way, consideration of the adjusted transfer price in the other State can ultimately prevent economic double taxation of the same profit by two tax creditors.
(2) Manifestly unlawful application of Article 185(2)(b) of CIR 92 through the tax practice at issue
50. The Belgian authorities, by contrast, argue that the semantic content of Article 185(2)(b) of CIR 92 is designed to ensure that a Belgian company belonging to a multinational group is taxed only on the profit that a standalone company would also have made. Profits above that level correspond to the effects of synergy, economies of scale or other benefits drawn from participation in a multinational group, according to the Belgian authorities. Those advantages, they assert, would not exist for a comparable standalone company and are therefore to be exempted from tax. ( 46 ) That is why, at the request of the taxpayers, only the (hypothetical) profit of a comparable standalone company was taxed.
51. That interpretation and the tax practice at issue which stems from it are manifestly not compatible with the wording of Article 185(2)(b) of CIR 92 and therefore do not form part of the reference framework.
52. Article 185(2)(b) of CIR 92 presupposes ‘ conditions agreed between the two companies ’ being the same as ‘those which would have been agreed between independent companies’. As is apparent from the introductory sentence of Article 185(2) of CIR 92, moreover, that provision applies only in respect of the ‘ reciprocal cross-border relationships ’ between associated companies.
53. The criterion of a specific cross-border business relationship and any conditions agreed in that context, however, play no part in the tax practice at issue. Profit reduction was granted independently of cross-border business relationships. It did not concern the application of the arm’s length principle to transfer prices, for example, but the reduction of the total profit of the Belgian company to a hypothetical profit. It is not even established to what extent the appellants agreed prices during the period in question for intra-group transactions (supplies and services) arising from cross-border relationships.
54. That application of the provision, which is at odds with its wording, cannot be plausibly explained. The requirement of a specific cross-border business relationship and of the agreement of conditions between two companies may be inferred from that provision just as easily as the absence of those criteria in the tax practice at issue.
55. Consequently, the appellants’ objection that the General Court failed to examine whether the tax practice at issue manifestly derogated from the reference framework is likewise unconvincing. Although the General Court did not expressly address the question whether the derogation was manifest, it did apply the standard of review proposed here in establishing that the tax practice at issue was at odds with the wording of the law.
(d) Interim conclusion
56. The tax practice at issue is manifestly not based on Article 185(2)(b) of CIR 92. Consequently, the General Court was right to confirm the Commission’s interpretation that that tax practice is not part of the reference framework but derogates from it.
4. Unilateral profit adjustment in favour of the taxpayer
57. As a result, there is no need to examine the appellants’ objection that the General Court distorted or disregarded the evidence which demonstrates that Article 185(2)(b) of CIR 92 allows the Belgian authorities to make a unilateral profit adjustment in favour of the taxpayer. Even if it did, the first two grounds of appeal would be unfounded since the tax practice at issue is, for the reasons just set out, manifestly at odds with the wording of Article 185(2)(b) of CIR 92.
58. For the sake of completeness alone, it should be noted that the appellants’ line of argument is based on a misunderstanding. That is because the General Court did not rely on the fact that the ‘excess profit’ exempted in Belgium was also taxed in the other State. The General Court merely required that that profit also be included in the profits of another company in the group.
5. Conclusion on the examination of the first two grounds of appeal
59. The General Court therefore correctly found that the Commission was right not to regard the tax practice at issue as part of the reference framework for Belgian corporate income tax, as its interpretation was manifestly contra legem . The appellants’ first two grounds of appeal are therefore unfounded.
B. The third ground of appeal: existence of an advantage
60. By their third ground of appeal, the appellants challenge the finding of the General Court that the Commission had demonstrated the existence of an advantage to the requisite legal standard in the decision at issue. They claim that the mere finding that the beneficiaries of the tax practice at issue were taxed on a hypothetical profit rather than on their actually realised profits does not suffice.
61. That objection is ineffective. As the General Court correctly found, ( 47 ) the tax practice at issue represented a lowering of the tax burden of the beneficiary companies, in comparison with the burden that would have arisen from normal taxation, under the Belgian corporate income tax system. While normal taxation includes application of the adjustments provided for by law – such as in Article 185(2)(b) of CIR 92 – the conditions under that provision are clearly not satisfied, as I have set out above (point 50 et seq.). The advantage of the tax practice at issue for the beneficiary companies therefore lay in the fact that the nature and amount of the basis of assessment were adjusted at the request of the taxpayers without that adjustment being provided for by Belgian law on corporate income tax.
62. That assessment is unaffected by the appellants’ objection that they may not have had to pay more tax even without the tax practice at issue, since it can already be assumed that the appellants did not apply to have a (hypothetical) profit taxed which was higher than the profit actually realised.
63. Even if, in a particular case, the – unlikely – situation arose that the beneficiaries would not have been subject to a higher tax burden without the tax rulings which they had obtained by way of the tax practice at issue, that would not affect the lawfulness of the decision at issue. The Commission would only need to examine at that stage whether, by reason of the arrangements provided for under the scheme, the tax practice at issue gave beneficiaries an appreciable advantage in relation to their competitors. ( 48 ) The Commission is not required to carry out an analysis of the aid granted in individual cases and, in particular, its exact amount. The individual situation of each undertaking concerned may be considered at the stage of recovery of the aid.
64. It follows that the third ground of appeal must be rejected.
C. The fourth ground of appeal: classification as a selective measure
65. By their fourth ground of appeal, the appellants challenge the General Court’s finding that the Commission did not err in law in finding that the tax practice at issue was selective.
66. That objection concerns the question to be examined at the second stage, namely whether the tax measure at issue is a derogation from the ordinary system, in so far as it differentiates between economic operators which, in the light of the objective pursued by the ordinary system, are in a comparable factual and legal situation (see point 29 above).
67. In the appellants’ view, none of the three reasons given by the Commission and upheld by the General Court justifies such unequal treatment of comparable companies by the tax practice at issue. Since the three reasons independently support the assumption of unequal treatment, the appellants’ ground of appeal is well founded only if all of the reasons prove to be incorrect. Conversely, if any one of the reasons proves to be valid, the fourth ground of appeal must be rejected.
1. Discrimination against standalone companies and companies belonging to a purely domestic corporate group
68. According to the General Court’s findings, the excess profit exemption leads to a selective disadvantage for undertakings that are not part of a multinational group. ( 49 ) That is because the aim of the Belgian corporate income tax system is to tax all profits of taxable companies, regardless of whether they are independent or belong to a multinational group. ( 50 )
69. By contrast, the tax practice at issue granted the beneficiaries a tax reduction by allowing them to deduct part of their profits from their tax base without those tax-exempt profits being included in the profits of another company in the group. ( 51 ) Consequently, companies belonging to a multinational group were treated differently from other companies, whose entire profits were taxed under the normal rules governing Belgian corporate income tax. ( 52 )
70. The appellants argue that the situation of companies forming part of a multinational group is not comparable to that of companies which do not belong to a corporate group or which belong to a purely domestic group.
71. It must therefore be examined whether, in terms of the objective pursued by the reference framework (uniform taxation of profits based on actual ability to pay), the factual and legal situation of companies belonging to multinational groups is comparable to that of standalone companies and of companies belonging to domestic groups.
72. It is true that the appellants rightly object that, unlike multinational groups, companies with purely domestic operations are not exposed to the risk of double taxation which may result from the adjustment of transfer prices.
73. However, the tax practice at issue does not actually address that risk of double taxation, since it does not require the existence of a cross-border transaction. Rather, the tax practice at issue is configured in such a way that it offers beneficiaries the option of switching from taxation of profits actually realised (which reflects the actual ability to pay) to taxation based on the hypothetical average profit of a standalone company. That ultimately means that taxpayers belonging to a multinational group can choose whether to pay corporate income tax on a certain part of their actual profits. That choice is not available to a standalone company.
74. Given the aim of taxing corporate profits on the basis of ability to pay, it follows that the risk of double taxation cannot justify the unequal treatment which resulted from the tax practice at issue. In that regard, the factual and legal situation of companies in multinational groups is comparable to that of standalone companies and companies in domestic groups. The bottom line is that the aim of uniform taxation of profits is not achieved if multinational companies are only required to pay tax on part of their profits corresponding to a hypothetical average profit, whereas all other taxpayers are required to pay tax on their actual profits in full.
75. Since the tax reduction is not available to the same extent to all taxpayers but only to Belgian companies in multinational groups, the General Court did not err in law in finding that the tax practice at issue discriminates between companies which, in terms of the aim of the general system, namely uniform taxation of profits based on ability to pay, are in a comparable factual and legal situation.
76. Consequently, for that reason alone, the fourth ground of appeal is unfounded. The Commission and the General Court did not err in law when they assumed unequal treatment.
2. Discrimination against companies , inter alia, not making investments in Belgium
77. There is no need to examine, in that context, whether the other distinctions raised by the Commission and considered by the General Court to be free from any error of law ( 53 ) also give rise to unequal treatment of economic operators in a comparable factual and legal situation. ( 54 ) As has just been shown, there is already unequal treatment between companies belonging to multinational groups of companies on the one hand and standalone companies and companies belonging to a purely domestic corporate group on the other (see point 71 et seq. above).
3. Conclusion on the examination of the fourth ground of appeal
78. Since the General Court was right to dismiss the objection to the classification of the tax practice at issue as a selective measure, the fourth ground of appeal is likewise unfounded.
D. Conclusion on the examination of the grounds of appeal
79. Since all four grounds of appeal are unfounded, the appeal must be dismissed.
VI. Costs
80. Under Article 184(2) of the Rules of Procedure, where the appeal is well founded and the Court of Justice itself gives final judgment in the case, the Court is to make a decision as to the costs. Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1), the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
81. Since the appellants have been unsuccessful and the Commission has applied for costs, the appellants must be ordered to bear their own costs and to pay those incurred by the Commission.
VII. Conclusion
82. In the light of all of the foregoing, I propose that the Court, in Cases C‑737/23 P to C‑742/23 P, should:
1. Dismiss the appeals;
2. Order the appellants to pay the costs of the appeal proceedings.
1 Original language: German.
2 Judgment of 20 September 2023, Capsugel Belgium and Others v Commission (T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16, EU:T:2023:567).
3 That concerns the proceedings in Cases C‑734/23 P and C‑735/23 P, C‑736/23 P, C‑752/23 P, C‑754/23 P, C‑755/23 P and C‑756/23 P, and C‑757/23 P and C‑758/23 P. This Opinion corresponds, in essence, to the statements made in my Opinion in Cases C‑734/23 P and C‑735/23 P. The only new elements are my remarks in point 60 et seq. regarding the complaint against the finding of an economic advantage.
4 Commission Decision (EU) 2016/1699 of 11 January 2016 on the excess profit exemption State aid scheme SA.37667 (2015/C) (ex 2015/NN) implemented by Belgium (OJ 2016 L 260, p. 61).
5 Transfer prices are the prices at which an enterprise transfers physical goods and intangible property or provides services to associated enterprises; see OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, pp. 13 and 14.
6 Moniteur belge of 9 July 2004.
7 Paragraphs 66, 67 and 70 of the judgment under appeal and recital 34 of the decision at issue.
8 Paragraphs 68 and 70 of the judgment under appeal, making reference to recital 38 of the decision at issue.
9 Paragraphs 71 and 72 of the judgment under appeal, making reference to recitals 39 to 42 of the decision at issue as well as the statement of the Minister for Finance of 30 November 2023, produced as Annex A.10.
10 On the following observation, see paragraph 73 of the judgment under appeal.
11 In fact, a percentage was determined which was obtained by comparing an estimated hypothetical average profit of a standalone company with an estimated actual profit of the taxpayer. That percentage was deducted from the taxpayer’s actual profits in the following five years.
12 Judgment of 14 February 2019, Belgium and Magnetrol International v Commission (T‑131/16 and T‑263/16, EU:T:2019:91).
13 Judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741).
14 Judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741, paragraphs 156 to 158, 169 and 170).
15 Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 36); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 105); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraph 27).
16 On the following observations, see judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 44); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 107); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraphs 31 and 32).
17 Paragraph 62 et seq. of the judgment under appeal, in particular paragraph 75.
18 Paragraph 62 of the judgment under appeal.
19 Paragraph 74 of the judgment under appeal.
20 It is true that the English-language version of the judgment refers to ‘already included’, rather than ‘also included’. However, it is clear from the statements of the General Court and from a comparison with, inter alia, the French-language version (‘ également repris ’), that that is a translation error.
21 Paragraph 69 of the judgment under appeal.
22 Paragraph 73 of the judgment under appeal.
23 See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 91 et seq.); in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:383, point 86 et seq.); and in Tesco-Global Áruházak (C‑323/18, EU:C:2019:567, point 147 et seq.).
24 See my Opinion in Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 27).
25 Judgments of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 119), and of 8 May 2019, Związek Gmin Zagłębia Miedziowego (C‑566/17, EU:C:2019:390, paragraph 39); see my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:383, point 99).
26 See judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 56); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 115 et seq.); and of 8 November 2022, Fiat Chrysler Finance Europe v Commission (C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraph 95 et seq.).
27 Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 48); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 112); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraph 37); see also, to that effect, with regard to fundamental rights, judgments of 3 March 2020, Vodafone Magyarország (C‑75/18, EU:C:2020:139, paragraph 49), and of 3 March 2020, Tesco-Global Áruházak (C‑323/18, EU:C:2020:140, paragraph 69 and the case-law cited).
28 Judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 42), and of 8 November 2022, Fiat Chrysler Finance Europe v Commission (C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraph 95 et seq.).
29 Judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985), and of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948).
30 Judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 120).
31 Judgment of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 56).
32 Judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 51).
33 Judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 80).
34 See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 101).
35 See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 98 et seq.) and in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, points 94 and 95).
36 See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 96).
37 See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 94) and in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 92).
38 Judgment of 15 November 2011, Commission and Kingdom of Spain v Government of Gibraltar and United Kingdom (C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 96 to 107).
39 See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 91).
40 Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 53); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 114); of 16 March 2021, Commission v Hungary (C‑596/19 P, EU:C:2021:202, paragraphs 48 and 49); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraphs 42 and 43).
41 See my Opinions in Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 34) and in Tesco-Global Áruházak (C‑323/18, EU:C:2019:567, point 151).
42 On that point, see judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 119). That principle requires that all the essential elements defining the substantive features of a tax must be regulated by the national legislature.
43 Judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 120).
44 If, on the basis of such a review, the EU institutions conclude that the national authorities are manifestly applying national tax law contra legem , a tax practice based on that application is not part of the reference framework but derogates from it. Whether it also constitutes a selective advantage must be established by means of the second and third stages of the three-stage test referred to above (point 29). See judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 60), and my Opinion on the same case, Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 28).
45 Transfer prices are the prices at which an enterprise transfers physical goods and intangible property or provides services to associated enterprises; see OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, pp. 13 and 14.
46 Belgium’s view is set out in recital 14 of the decision at issue.
47 Paragraph 28 of the judgment under appeal.
48 On the following observation, see judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741, paragraph 77).
49 Paragraph 95 et seq. of the judgment under appeal.
50 Paragraph 98 of the judgment under appeal.
51 Paragraph 99 of the judgment under appeal.
52 Paragraph 101 of the judgment under appeal.
53 Paragraph 102 et seq. and paragraph 110 et seq. of the judgment under appeal.
54 See the further statements in my Opinion in Cases C‑734/23 P and C‑735/23 P (point 89 et seq.).