Margrethe Vestager, the commissioner in charge of competition policy, said the tax scheme distorts competition by putting smaller companies who are not multinational on an unequal footing.
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But a person familiar with the matter said the largest beneficiaries of the Belgian scheme-and therefore those likely to face the biggest back-tax demands-were AB InBev, Swedish industrial company Atlas Copco, BP, BASF, Belgian telecom operator Belgacom, now known as Proximus Group, French retailer Celio and vehicle-component manufacturer Wabco.
Excess-profit rulings allowed 35 companies operating cross-border to get deductions on half or even as much as 90 percent of profits covered by the Belgian pacts, according to a European Commission statement.
Such back taxes would not affect Belgium’s structural deficit, he said.
This type of preferential tax structure is illegal under European Union rules, the regulator said. The EU deemed this illegal and ordered Belgium to recover the full unpaid tax, estimated at around 700 million euros in total.
The deals are not illegal and critics say the European Union has been unfairly targeting U.S. companies.
Brussels has also launched an investigation into McDonald’s tax arrangements and is due to deliver verdicts on Apple (LSE: 0R2V.L – news) and Amazon’s deals with Ireland (Other OTC: IRLD – news) and Luxembourg this year.
“We know of no other scheme similar to this, probably that was one reason it was named “only in Belgium”, Ms Vestager said.
The European Commission has ordered the government to recover money from 35 mainly European, but unidentified, companies across a range of sectors.
Belgian Finance Minister Johan Van Overtveldt said the ruling was in line with his expectations and that the “excess profit” system, introduced in 2005, had been on hold since February 2015, when the investigation began.
The deals have been controversial in the USA, where lawmakers have criticized them for allowing some companies to shift profits off-shore to cut their tax bill.
“We will consider our options, taking into account the reactions by the Belgian authorities”, the company said-leaving the door open to an appeal with the EU’s top courts in Luxembourg.
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Europeans are frustrated over the idea of large companies getting tax breaks when national governments are struggling to balance their budgets.
