The European Commission has closed its investigation into an arrangement between Belgium and Belgian-based multinational materials technology company UMICORE, which it says does not constitute state aid.
Following its in-depth investigation, interrupted for several years owing to a parallel investigation by the Belgian judicial authorities, the Commission concluded that the arrangement agreed on between the Belgian tax authorities and UMICORE in December 2000 does not constitute state aid.
The Commission therefore closed the formal investigation procedure, which it had initiated in December 2003. In October 2001, the Commission was informed of a settlement agreement reached in December 2000 between the Belgian tax authorities’ Special Tax Inspectorate (Inspection Spéciale des Impôts-ISI) and UMICORE SA (formerly UNION MINIÈRE SA). In response to various requests for information from the Commission, the Belgian authorities have confirmed the existence of this arrangement, which did not in their view entail any tax benefit for UMICORE. The Group’s activity involves manufacture of basic iron and steel and of ferro-alloys.
The preliminary examination by the Commission showed that the Belgian tax authorities had initially thought UMICORE had applied VAT exemptions incorrectly in the case of certain sales of silver to undertakings established in other Member States. UMICORE consequently received a demand to pay VAT amounting to approximately 20 million. However, after several months of negotiations and following further investigations, the ISI finally came to an arrangement with UMICORE on 21 December 2000, under which the company was to pay a fine of 10 million in full and final settlement of the claim.
In December 2003, the Commission launched an in-depth investigation in view of doubts as to the possible existence of state aid resulting in an undue VAT rebate.
When the procedure was initiated, the Belgian authorities informed the Commission that UMICORE’s tax file and all the evidence relating to the agreement in question had been seized by the Brussels public prosecutor’s office. It was not until 2009 that Belgium informed the Commission that it had been able to recover the evidence seized, and the Commission was able to continue with its investigation.
In connection with its in-depth investigation, the Commission identified four types of contentious transactions relating to cross-border supplies of silver grain, and carried out a detailed analysis of the circumstances with regard to the tax rules applicable. This analysis has enabled the Commission to establish that, pursuant to the principle of taxation on the basis of the facts, a VAT rebate was possible in the case of some transactions, and that the settlement agreement had not therefore given rise to any fiscal benefit for UMICORE. The measure does not therefore constitute state aid.
