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27/08/2016

Belgian Commissioner De Gucht to face trial for tax fraud

Justice & Home Affairs

Belgian Commissioner De Gucht to face trial for tax fraud

Karel de Gucht.jpg

The Belgian tax authorities have asked Trade Commissioner Karel De Gucht to pay the state some €900,000 for not having reported a €1.2 million gain he and his wife made from a transaction before he became commissioner in 2009.

The case, a significant embarrassment for the EU executive, will be brought before a court in Ghent, Belgium.

The trial, which concerns the conditions in which the Belgian EU commissioner purchased a holiday home in Tuscany in 2005, will begin on 25 November, Belgian press reported today (8 November).

The issue comes seven months before the European elections.

According to the Flemish daily De Tijd, De Gucht denied claims of tax evasion, but a deal was proposed behind closed doors with the fiscal authorities so as not to harm his reputation. However, the deal was not successful, and now De Gucht and his wife will fight the accusation in court.

The tax inspectors have asked De Gucht to pay a fine of 50% of the transaction and interest, in addition to the alleged unpaid tax. De Gucht will appeal against the financial sanction.

On Thursday, De Gucht was quoted as saying that he would consider being Belgium's nominee for commissioner in the next EU executive that will be selected after the elections, in May. He added it would be normal for a Flemish Belgian to take on the role as commissioner two times in a row.

De Gucht was a commissioner under the first term of José Manuel Barroso for a few months, holding the portfolio of research, which he inherited from Louis Michel, a Walloon. He excluded a return to political life in Belgium. 

De Gucht is a politician for Open VLD, the Flemish liberal party formerly led by Guy Verhofstadt. After Verhofstadt, a former Belgian prime minister and current leader of the liberal ALDE group in the European Parliament, quit Open VLD, the party has been in free fall.

Under heavy fire

Pia Ahrenkilde Hansen, a spokesperson for Barroso, said that De Gucht had informed the Commission president today of the “most recent development” in his legal case and that he had assured him that there had been “no wrongdoing” from his side. The president had to respect the presumption of innocence, Hansen added.

Ahrenkilde Hansen also insisted that the charges against De Gucht were unrelated to his role as commissioner, and rejected comparisons with the case of former Health Commissioner John Dalli, who was put under pressure by Barroso last year to resignThe allegations against him were not substantiated and did not lead to any legal action.

Ahrenkilde Hansen emphasised that the De Gucht case was "a private matter", which had "no incidence" on his work as commissioner.

By contrast, she said, the Dalli case was based on an a enquiry by the EU’s anti-fraud office OLAF. However, since the case, OLAF’s chief Giovanni Kessler has avoided contact with the press.

Asked by EurActiv to explain if De Gucht should take unpaid leave until his case was solved, Ahrenkilde Hansen suggested that that was not the case, adding that the Code of Conduct of Commissioners did not predict all possible scenarios.

Despite heavy questioning, the spokesperson avoided answering whether Barroso would have to resign if De Gucht was found guilty.

De Gucht is in charge of various important issues in the EU executive at moment, including negotiations for the Transatlantic Trade and Investment Partnership (TTIP) with the United States. A second round of negotiations are scheduled for next week.

De Gucht's declaration of financial interests, which he signed in 2011, says that he does not own any real estate, except his home in Berlare, near Ghent. 

Timeline

  • 11-15 Nov.: EU and US to hold second round of trade negotiations (TTIP) in Brussels
  • 25 Nov.: De Gucht’s trial to begin in the city of Ghent

Further Reading