After long years of proceedings, the Finnish energy group Fortum won its case against the Special Tax Inspectorate over a structure set up in Belgium, L’Echo and De Tijd report on Wednesday. The decision of the Antwerp justice will certainly cost the Belgian Treasury more than one hundred million euros. The IRS does not intend to appeal.
The Belgian entity in question, Fortum EIF NV, acted as the group’s internal bank: it granted loans to the group’s other subsidiaries around the world. Fortum thus benefited from the Belgian tax advantage of the notional interest deduction.
Fortum has thus resorted in particular to its Belgian company to finance the takeover of a company in a transaction of 4 billion euros. Thanks to the tax advantage, Fortum EIF NV was able to apply the notional interest deduction on almost all of its profits with us. But as early as 2011, the ISI saw in it a construction imagined for purely tax purposes without any financial or economic relevance. This led it to inflict substantial tax adjustments on the Belgian entity.
In June 2020, Fortum applied to the Antwerp courts to challenge these claims by the ISI for the 2010, 2011, 2012 and 2013 financial years. The court of first instance therefore agreed with it, finding that the implementation of this legal structure was justified. The cancellation of the tax notices for the years 2010 to 2013 will allow Fortum to recover 104.2 million euros in undue taxes and default interest.