On 21 January 1999, the Competition Council ruled that Suzuki had abused its dominant position on the market for issuing conformity certificates for its own brand motorcycles and imposed a fine of 247,893 Euro on Suzuki. Suzuki had considered the fine as a deductible professional cost in the sense of Article 49 of the Income Tax Code (ITC) and treated it accordingly in its tax declaration made in 1999 (calendar year 1998). However, the Tax Administration rejected this cost and held that Article 53, 6° ITC (which provides that fines cannot be considered as a deductible professional cost) concerns all sorts of fines, irrespective of whether these have a criminal or an administrative nature.
The Court of Appeal did not accept this reasoning and ruled that Article 53, 6° ITC only applies to fines of a criminal nature. It also held that the fact that an administrative fine could be qualified as a criminal fine, in the sense of Article 6 of the European Convention on Human Rights, does not imply that that fine should be treated as having a criminal nature for the application of Article 53, 6° ITC, as it was not imposed on the basis of a Belgian criminal law. The Court concluded that there was a necessary link between the fine and Suzuki's professional activity: its cause lay in the pursuit of high profit margins, and accordingly fines imposed by the Competition Council can be considered as a deductible professional cost in the sense of Article 49 ITC.
The Antwerp Court of Appeal nevertheless refused the deductibility of the fine in question. It stated that antitrust fines can only be included in a tax declaration once they have become a certain and fixed debt (in this case on the date of the Competition Council's decision). Suzuki had however already included the fine in its tax declaration relating to calendar year 1998 (assessment year 1999), i.e. before 21 January 1999.
This decision goes directly against the Tax Administration's circular of August 2008 in which it announced that the deductibility of cartel fines imposed by the European Commission would no longer be accepted, as Article 53,6° TIC does not only apply to fines of a criminal nature.
Earlier this year, the Competition Council's decision of January 1999, fining Suzuki, Honda, Yamaha and Kawasaki for abuse of dominance, also gave rise to a Brussels Court of Appeal judgement on the method for calculating fines in competition cases (Belgian Competition law report 2009/Q1).