Amendment to the rules on Belgian Coordination Centres
The Coordination Centre regime is a favourable tax regime established for Belgian entities or  permanent establishments belonging to an international group of  companies, that perform certain intra-group financing and coordination services. Under this regime, qualifying entities are entitled to a largely reduced  corporate income tax basis computed on the basis of certain  costs, and an exemption from withholding tax, real estate duty and capital  duty.
In a decision of 17 February 2003, the European Commission determined that the Coordination Centres regime is an incompatible state aid and ordered therefore that, as of the date of the notification of its decision to the Belgian government, the benefits of the Coordination Centre regime could no longer be granted to new beneficiaries or maintained by renewing existing agreements.
Coordination Centres,  that were approved before 31 December 2000, could continue to benefit from the regime until the expiration date of the individual approval applying on the date of the notification and until 31 December 2010 at the latest.
Following an appeal by the Belgian government the European Court of Justice in June 2006 partially annulled the Commission’s 17 February 2003 decision because it did not provide for “transition arrangements for those coordination centres with an application for renewal of their authorisation pending on the date on which the contested decision was notified or with authorisation which expired at the same time or shortly after the notification of the decision”. According to the ECJ “shortly after” means a date so close to the notification that the Coordination Centres concerned “did not have the time required to adjust to the change”.
The Commission has now decided that the period required to adjust to the change should have ended on 31 December 2005 and Coordination Centres affected by the lack of transition arrangements could benefit from the regime until that date. The Commission will challenge any approvals or renewals not compatible with the February 2003 and November 2007 decisions as illegal new aid and intends to order the Belgian government to recover such aid and interest.