In line with an earlier conclusion of the Advocate General at the Supreme Court8, the Amsterdam Court of Appeal has held that fines for cartel infringements imposed by neither the NMa nor by the European Commission are deductible for corporate tax purposes.9 In its amicus curiae intervention10, the European Commission considered tax deductibility of EU cartel fines contrary to the member states’ Community loyalty. Other EU member states have thus been warned.
This ruling sets aside the earlier judgment by the Haarlem District Court allowing for the (partial) deductibility of European Commission fines.11 According to the Haarlem District Court, it followed from the wording of Regulation 17/6212 that fines imposed by the European Commission for competition law infringements are partly non-punitive in nature and therefore tax deductible for that part. In appeal, the Amsterdam Court of Appeal found that Regulation 17/62 confirms the punitive nature of cartel fines. The possibility for the European Commission to take account of the profit made by the illegal cartel in setting the level of the fine13 does not alter this, since this is merely meant to adjust the fine amount to the gravity and duration of the infringement. Moreover, the Dutch Income Tax Act explicitly leaves no room for a distinction between a (non-deductible) punitive part, and a (deductible) non-punitive part. Consequently, it is not possible to deduct European competition fines from taxes.
The Supreme Court will have the final say in the matter, as it still needs to rule on the case in which the Advocate General provided his conclusion earlier. The Supreme Court is generally inclined to follow the Advocate General’s conclusion.