In a case brought by the Belgian State against Tessenderlo Chemie NV, the Court of First Instance in Brussels referred two questions to the Constitutional Court for a preliminary ruling.

The questions aimed to establish whether it was a breach of articles 10 and 11 of the Belgian Constitution (principle of equality) to interpret the Income Tax Code as meaning that the fines imposed by the Commission on Tessenderlo Chemie NV by a decision of 20 July 2010 constituted a deductible business expense.

These questions related to the nature of the fine, which is not imposed under criminal law but by the Commission under Regulation (EC) n° 1/2003.

Pursuant to article 15(3) of Regulation 1/2003, the Commission, acting on its own initiative, may submit written observations ("amicus curiae" observations) to national courts where the coherent application of article 101 (illegal agreements between undertakings) or 102 (abuse of dominant position) of the Treaty on the Functioning of the European Union (TFEU) so requires.

In this case, the Commission submitted written observations before the Constitutional Court.

The Commission upholds that the tax deductibility of the fines it imposes for the infringement of article 101 of the TFEU, whether in full or in part, endangers the objectives of the EU and is contrary to the principle of loyal cooperation by Member States as laid down in article 4(3) of the Treaty on European Union (TEU).

Indeed, tax deductibility provides for a considerable advantage for the company concerned in the sense that a part of the fine is “repaid” by the State. The fines, which are based on the turnover of the company concerned and the duration and gravity of the infringement, constitute a punishment for this infringement and should have a deterrent effect. For the Commission, the tax deductibility of the fine would undermine this deterrent effect. Therefore, it stated that the tax deductibility of these fines was contrary to EU law.