Following an in-depth investigation opened in February 2015, the commission concluded that the country’s ‘excess profit’ tax scheme granted selective tax advantages that amount to illegal state aid.

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.

“There are many legal ways for EU countries to subsidise investment and many good reasons to invest in the EU,” she said. “However if a country gives certain multinationals illegal tax benefits that allow them to avoid paying taxes on the majority of their actual profits, it seriously harms fair competition in the EU, ultimately at the expense of EU citizens.”

Belgium’s ‘excess profit’ tax scheme, which came into effect in 2005, allowed certain multinationals to pay substantially less tax in Belgium on the basis of tax rulings.

The commission said the scheme reduced the corporate tax base of these 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 granted to the groups, the actual recorded profit of the multinational was compared with the hypothetical average profit a stand-alone company in a comparable situation would have made.

The alleged difference in profit was then deemed to be “excess profit” by the tax authorities and the company’s tax base reduced accordingly, based on the premise that excess profits arise as a result of the economies of scale, client and supply networks or other qualities associated with being part of a group.

The scheme was marketed by the country’s tax authority under the logo “Only in Belgium”. The commission said it represents a very serious distortion of competition.

The commission did not say which companies are involved but described them as “mainly European companies”.

The commission has been cracking down on corporate tax avoidance and “sweetheart” tax deals for large companies.

It has ordered Fiat Finance and Starbucks to repay millions of Euros to Luxembourg and the Netherlands respectively, and also opened investigations into tax rulings for McDonalds and Amazon from Luxembourg.

MEPs also voted to adopt a suite of corporate tax reforms in October, following an international initiative led by the OECD to overhaul the international tax architecture to prevent companies from shifting their profits across borders to tax havens.