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The Excess Profit Exemption System · Joined Cases T-131/16 and T-263/16 Belgium v Commission · Annotation by François-Guillaume de Lichtervelde

Annotation on the judgment of the General Court (Seventh Chamber, Extended Composition) of 14 February 2019 in Joined Cases T‑131/16 Belgium v Commission and T-263/16 Magnetrol v Commission

DOI https://doi.org/10.21552/estal/2019/3/18

François-Guillaume de Lichtervelde


As the first State aid case involving tax rulings to reach the General Court, the judgment regarding the Belgian ‘excess profit exemption’ regime was highly anticipated. Instead of investigating separately the tax rulings granting the exemption, the Commission had intended to frame the case at the higher level and went after an ‘aid scheme’. The Court did not follow this qualification and set aside the Commission’s Decision. While the judgment inflicted a blow to the enforcer’s approach, the Court did not take a position on the most sensitive questions raised by this case. The boundaries of EU State aid control with respect to tax rulings thus still remain unclear. However, the judgment established that Belgium enjoyed a margin of discretion in adopting the rulings that granted the excess profit exemption. This finding, which was fatal to the Commission’s scheme-based theory, may now support the Commission’s case that the rulings are ‘selective’ and could therefore amount to State aid. In that sense, the judgment may ultimately have done more harm than good to Belgium’s case against the Commission’s investigation.
Keywords: Excess Profit Exemption; Tax Rulings; Aid Scheme; Individual Aid; Belgium; Discretion; Selectivity.

François-Guillaume de Lichtervelde is an Associate at Cleary Gottlieb Steen & Hamilton LLP, Brussels. The author wishes to thank Anna Maurer, Summer Associate at Cleary Gottlieb Steen & Hamilton LLP for her valuable research assistance.

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