The ruling requires the tax authorities there to recover some €700m (£590m) in unpaid tax from Belgian companies who were part of multinational companies and used what it called ‘selective tax advantages’.

In January the European Commission stated: ‘The Belgian “excess profit” tax scheme, applicable since 2005, allowed certain multinational group companies to pay substantially less tax in Belgium on the basis of tax rulings.

‘The scheme reduced the corporate tax base of the companies by between 50% and 90% to discount for so-called “excess profits” that allegedly result from being part of a multinational group.’

Under the tax rulings the actual recorded profit of a multinational was compared to the hypothetical profit of a standalone company in a similar position. The difference was then deemed to be 'excess profit' and the tax base reduced accordingly, the Commission said.

The Commission held that the scheme contravened state aid rules since it overruled normal Belgian company tax rules and the arm's length principle. Around 35 multinationals, mostly from the EU, were found to have benefited.

Belgium appealed against this decision, arguing any repayment should be halted or delayed as an ‘interim relief’, because the case had led to considerable legal uncertainty for companies and the government was concerned about a drop in investment in the country. It also said the tax authorities had only limited administrative capacity to cope with the task of collecting the necessary data from each company and recalculating the tax due.

However, the court found that ‘the condition relating to urgency is not satisfied’ and Belgium had failed to show it would suffer ‘serious and irreparable harm’ if the decision was not suspended. As a result, the request was rejected.

Caroline Ramsay, a state aid expert with law firm Pinsent Masons, said: ‘Suspensions of claw back orders in state aid cases are notoriously difficult to get so it is no great surprise that this application failed.

‘This sends a strong signal to other companies subject to state aid tax investigations that, unless serious and irreparable harm of the aid recipient can be pointed to, it is likely that the claw back order will be enforced pending the outcome of the appeal.’

Caroline Janssens, a competition law expert with Pinsent Masons, said the clawback of unlawful aid, particularly in the context of a state aid scheme, carried ‘enormous complexities’.

‘In this case, given the large number of companies involved, the process is very likely to take many years, with damaging consequence for all parties involved. A recovery order usually involves payment of the full amount of the tax advantage received, including interests at a high rate.

‘The organisations that have been awarded the unlawful state aid are likely to suffer severe financial consequences as, by repaying the aid, their cash flow or funds could be significantly reduced.
‘The authority that granted the unlawful aid will undoubtedly suffer reputational damage, too,’ she said.

Belgium's appeal against the main conclusion of the Commission's investigation, that the excess profits scheme deviates from the arm's length standard set forth in OECD transfer pricing guidance, is ongoing.

The European Commission general court ruling on Belgium’s appeal regarding the excess profits scheme and state aid is here.