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EU Shuts Down Belgium Tax Breaks for Multinationals

European Competition Commissioner Margrethe Vestager addresses a news conference in Brussels, Belgium, Jan.11, 2016, after the EU demanded Monday that Belgium recover millions of euros from 35 large companies in back taxes.

The European Commission ordered Belgium on Monday to recover more than $760 million in illegal tax breaks from dozens of multinationals, the EU executive's biggest move yet to crack down on tax avoidance by large companies.

The Commission said Belgium's "excess profit" tax system, offered to some 35 multinationals, breached EU rules on state aid to companies and could enable them to reduce their tax bases by up to 90 percent. It said the same benefit was not granted to smaller firms, distorting competition.

The Commission said it could not name the companies involved, but they are mostly European corporations and those companies would pay back most of the amount due.

The Commission, which rules on EU competition issues, has faced accusations of bias in its investigations against non-EU companies, notably U.S. tech giants.

Competition Commissioner Margrethe Vestager told a news conference Monday, "Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules. It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing."

"The European Commission has concluded that selective tax advantages granted by Belgium under its 'excess profit' tax scheme are illegal under EU state aid rules," Vestager said