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Tax system, private sector, shareholding and climate objectives – the case of Belgium

  1. Créé par Rudi COEL
  2. Le 05/08/2022
  3. 18192021Dans Diensten Consultancy Via e-mail België

Lijst details

Organisation : Oxfam-Solidariteit
Geschatte duur : 45 jours
Uitvoeringstermijn : 14/10/2022 au 21/11/2022
Publicatie datum : 05/08/2022
Inlever deadline : 31/08/2022
Contactpersoon : OBE.TENDER@oxfam.org


Oxfam-Solidariteit (hereafter OS or Oxfam), non-governmental organisation for humanitarian assistance and development aid, launches an Invitation to Quote (IQ) for a study on the evaluation of Belgium’s climate objectives in relation to the tax system, large companies and shareholding.

The quote must arrive at latest on 31 August, midnight CET and stay valid until 11 September, midnight CET


Samenvatting van de verwachtingen van de leveranciers

    1. Objective

The objective of this study is to evaluate the social and environmental impact of the governance of large companies in Belgium in order to recognize their responsibility (and therefore their capacity to act) on social and environmental issues. First of all, we want to analyse the financial management of these companies. We want to see in what proportion the profits made are paid back to the shareholders and in what proportion they are redirected to social or environmental measures. We also want to know if the company's results have an impact on the payment of dividends or if these are always guaranteed. We want to know what the trend is between the evolution of the CEO's salary and the evolution of the salary of the company's workers in order to see to whom the added value is redistributed. We want to know whether crisis contexts have created exceptional profits or losses and how companies have reacted to these crises in their financial governance. Finally, we want to assess what share of corporate profits should be allocated to climate ambitions in order to respect the trajectory of limiting global warming to 1.5°C. To do so, we also want to know the average tax rate of companies over a 10-year period in order to assess whether they pay more or less taxes than the nominal rate in force and to evaluate whether the state suffers a loss of revenue due to mechanisms that it has itself helped to put in place.


    1. Background

IPCC special report on 1.5 confirmed the importance of limiting global warming to the Paris target of 1.5 to avoid irreversible catastrophic impacts. No amount of adaptation can compensate for the terrible consequences of failing to hit this goal. Furthermore, IPCC special report on Climate Change and Land made it clear that carbon sequestration at scale can have enormous consequences for food security and people living in poverty. Measures therefore need to concentrate first and foremost on reducing emissions at the source. To achieve this, climate action cannot be limited to changing individual behaviours. It needs to target those who are benefiting the most and have a historical responsibility for the climate crisis, big businesses and multinationals. Governments need to design and enforce measures to make sure that private sector strategies remain in line with the goals of the Paris Agreement, as agreed at COP21.


In 2021, parties reaffirmed during the COP26 that the private sector and financial actors have a role to play in the energy transition. Oxfam has raised the question of what constitutes genuine corporate climate action – which must include setting up ambitious and science-based targets. The recent IPCC assessment report on mitigation provides evidence on the role of taxation schemes in reducing carbon emissions and fostering low-emissions technological innovation. It also indicates that only 20% of global GHG emissions were covered by carbon taxes or emissions trading systems, and that coverage and prices have been insufficient to achieve deep reductions.


Meanwhile, the tax system in Belgium provides some large companies with the means to lower their effective tax rate on profits or revenue. The global trend towards lower corporate taxes has been observed at least since the 1980s, particularly in rich countries. In addition, opaque tax havens with very low tax rates and aggressive tax competition between countries lead to a race to the bottom in corporate taxation. Recent developments in international taxation agreed at the OECD level (the introduction of unitary and minimum taxation of large multinationals) are, however, insufficient at this stage to definitively halt this trend. Every year, this situation deprives public authorities of substantial revenues that could be invested in climate action (both for mitigation and adaptation, as well as source for their commitments on international climate finance and loss & damage for vulnerable countries).  For example, according to Oxfam's computations, Belgium would have to budget between USD 190 and 310 million each year to comply with the Global Climate Fund's funding in an equitable way.

As Oxfam we call for large corporations to publish their (scope 1, 2 and 3) greenhouse gas emissions (in absolute value) and formulate transparent reduction yearly targets in line with the Paris Agreement, with an intermediate climate goal in 2030 of at least 65% of reduction for EU countries with a view to reach zero emissions by 2040. The company should also disclose an investment plan to demonstrate that they are putting the means to reach their goals[1].


Voluntary actions are not sufficient: unilaterally deciding on emissions’ reduction objectives will not take us on a common trajectory that is compatible with 1.5°.  Research in the EU on 1000 companies showed that only 13.9% have adopted science-based targets that are aligned with the Paris Agreement. Furthermore, Oxfam’s report on net zero emissions shows that current net zero strategies could require a surface of 5 times India to compensate for emissions. Public regulation is needed to solve a common good problem.


    1. Annexes to be provided after signature of a contract
  • Previous Oxfam research
  • Available data from BE and other EU administrations
  • Relevant studies from other NGOs:


    1. Research questions

Overall : Does the Belgian tax system benefit companies and shareholders at the expense of climate trajectories that should engage the private sector?

  1. Who are the largest private sector economic actors in Belgium (ideally 20-25 companies)?

Selection of a sample of 20 to 25 companies. Companies that have been present in the BEL20 for at least 5 years over the last 10 years.


We also want to add a few companies relevant for the study. It would be interesting to propose a methodology to evaluate the largest companies without referring only to the BEL20. Indeed, if you only use the BEL20, you miss foreign companies that are very active in the country, but also multinationals and well-known companies such as Arcelor Mittal, ExxonMobil, Audi, Toyota, Delhaize, etc.     


  1. What is the evolution of the financial situation of the companies studied over the last 10 years? With related breakdown between payments to shareholders and income tax paid by companies
    1. Over the studied period, when do companies make losses? When do they make a profit?

This section aims to evaluate the financial situation of the companies studied. Are they making a loss or a profit in the years studied? By how much?

    1. Were there any exceptional profits or losses in any year? If so, when and what factors explain the emergence of these exceptional profits or losses?

This section must determine whether, in relation to all years, certain years show an exceptional profit attributable to particular situations (rise in energy prices, covid crisis, etc.)

    1. How are profits redistributed? In the form of investments? In the form of dividends? Are any profits reinvested to reduce the company's carbon footprint? Is there a reinvestment to mind the gender gap in the company?

This section should provide an analysis of the use of corporate profits. The aim is to determine how much of the profits are reinvested in the company and how much is paid out in the form of dividends, for example. With respect to the share of profits reinvested in the firm, it would be useful to determine the nature of the investments made (staff salaries, sustainable investments, etc.).           

It would also be interesting to know if any companies have established a plan to reduce their carbon footprint.


  1. Evaluate the income inequality between the wages of company CEOs and the wages of workers. Evaluate the range between the CEO's salary and the lowest salary of the company. Evaluate, during the period studied, what is the evolution of the CEO's wage and what is the evolution of the workers' wage. Evaluate in which sector of activity wage inequalities are the most noticeable.


Evaluate and illustrate the ratio between payments to shareholders and turnover and the ratio between personnel expenses and turnover.


  1. How much investment is needed in Belgium to meet the trajectory of limiting global warming to 1.5°C (-55%/-65% by 2030, neutrality by 2050/2040)?


We are considering two trajectories - the first one according to the EU commitments: 55% reduction by 2030 and neutrality in 2050. The second one according to Oxfam's recommendations: 65% reduction by 2030 and neutrality in 2040.           

Link with biofuels: We would like to know if these companies are trading/using biofuels (which kinds of fuel) in Belgium. If yes, do they consider it part of their “emissions reductions strategy”.

    1. What is the estimated public investment needed? And can you estimate how much this investment is currently worth in Belgium?

We need to be able to determine what public investment is needed to comply with the 1.5°C trajectory. We also need to be able to determine what investment is currently being allocated by the public authorities and whether it is sufficient to meet the trajectory. If current public investment is not sufficient, we need to be able to determine an ideal trajectory for public investment to compensate for the gap.

Some public data may already be available on this.


    1. What is the estimated investment needed from the private sector?          

In parallel to the necessary public investment, it is necessary to be able to calculate the private sector investment to comply with the 1.5°c trajectory. It would also be useful to assess the share of investment needed for specific areas of activity. For example: aviation, supermarkets, the chemical industry, the pharmaceutical sector.

The computations could be based on the European Commission's impact assessment analysis carried out in 2020. Also used in previous studies.


    1. Can we determine what share of profits should be allocated to investments for the transition in order to respect the 1.5°c trajectory (-55/-65% by 2030, neutrality by 2050/2040)?

In line with the estimates in 3.b., the question here is to determine what share of profits should be allocated to the company's investment in its own transition to meet the 1.5°c trajectory.  


  1. What is the evolution of dividend payments for the companies studied over the last 10 years
    1. Do companies pay dividends when their financial situation is negative?

This involves analysing the periods at which firms pay dividends. What is the total amount of dividends, the evolution of the value of a dividend per share and are these payments made even if the company's financial situation is negative (in which case this may mean that it is using its reserves to pay the shareholders).


    1. What is the composition of the main shareholder groups in the companies studied?

This identification should allow conclusions to be drawn about the economic and political interests of the shareholders.


The aim is to identify the main shareholders of Belgian companies. Are they Belgian families, foreign stakeholders, public institution, others ? Can we draw conclusions based on gender? What is the nature of these shareholders and do they also have activities in other companies abroad for example (in the fossil fuel industry for example).


  1. What is the effective tax rate on the profits of the companies studied over the last 10  years?
    1. What is the effective tax rate for the whole period for each company?

It would also be interesting to determine the overall effective tax rate of the companies studied over the entire period.


The tax rate on corporate profits has evolved in Belgium over the past few years. This is important to note. In 2018, the official rate dropped from 33% to 29%. And it is now 25%. The point here is to see what the effective tax rate of the companies studied is for each year.


The new rules of taxation of multinationals foresee a rate of 15% for the largest multinationals with a turnover of 750 million €. It would be interesting to know which multinationals would be subject to these new rules.


    1. What are the tax mechanisms that explain why the companies studied are subject to an effective tax rate on profits in Belgium that is lower than the nominal rate of 25%?   

Identify which tax mechanisms Belgium provides that can explain a decrease in the ETR.


Does the granting of these tax advantages by the Belgian government require from the company a measured and quantified result in terms of climate, job creation, etc... Or are these tax advantages granted without any real counterpart?


Moreover, sometimes it may not be a question of tax mechanism as such, but of failures to provide for more tax transparency, for example. Thus, mechanisms that are external to Belgian tax law but against which Belgium does not fight should also be identified to explain the decrease in the tax rate.


    1. How Belgium encourages the use of biofuel. Does it give incentives to some companies? Which ones? Do these subsidies take the form of tax cuts?


    1. How much tax revenue is lost to the state as a result of the difference between the effective tax rate and the nominal tax rate on profits of 25%?

Evaluate, on the basis of the official tax rate, what is the tax loss for the State. Take into account that the nominal tax rate has decreased over time.


    1. Evaluate how much of this missing revenue should be allocated to climate action in order for Belgium to meet its obligations in terms of the public investment needed to comply with the 1.5°C climate trajectory?

Assess how much of the missing tax revenue would be needed to meet the public investment target consistent with the 1.5°C trajectory as discussed in 4.a.


    1. Requested profile

The consultant should have :

  • strong data analysis and research skills
  • Extensive knowledge of the Belgian corporate tax system
  • Good knowledge of corporate governance analysis related to climate goals
  • Strong experience in analysis and evaluation of tax system, shareholding and assessment of climate objectives.
  • Proven analytical, synthesis and writing skills in English, French and/or Dutch.
  • Ability to write for policy makers and the general public.
  • Professional knowledge of French and Dutch is an asset.


    1. Deliverables

Deliverables have to meet OS quality standards.

  • A final report with interpreted data in English, French or Dutch
  • Diagrams and tables to illustrate the results.
  • A methodological note in English on how companies are selected, how are income inequalities within the company calculated, how is public and private sector investment for climate action calculated, how is the average tax rate calculated


    1. Calendar

14 October: methodological guide

28 October: draft version of the documents and follow up meetings

21 November: final report



[1] Oxfam position (Corporate Governance Policy Compendium, 2021)