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Magnetrol v Commission: When Do Advance Tax Rulings Become an Aid Scheme under Article 1(d) Regulation (EU) 2015/1589 · Case C-337/19 P Magnetrol v Commission · Annotation by Benedikt Freund and Moritz Seiler

Annotation on the Judgment of the Court (Fourth Chamber) of 16 September 2021 in Case C-337/19 P Commission v Belgium and Magnetrol

Benedikt Freund, Moritz Seiler


Keywords: aid scheme, consistent administrative practice, tax rulings, Article 1(d) of Regulation (EU) 2015/1589

In its decision of 14 February 2019, the General Court declared that the Commission had wrongly classified the Belgian ‘excess profit exemption system’ as an aid scheme according to Article 1(d) of Regulation 2015/1589. Allowing the Commission’s appeal, the Court of Justice found that the concept of an aid scheme according to Article 1(d) of Regulation (EU) 2015/1589 also encompassed a consistent administrative practice of a Member State tax authority. As a result, even where a Member State’s tax legislation itself is in compliance with State aid rules, the Commission is now in a position to establish the existence of an aid scheme, rather than having to prosecute every case individually, if a Member State tax authority has issued a significant number of (advance) tax rulings that deviate from its compliant legislation. After a series of mixed results in tax-related State aid cases, Magnetrol represents an important win for the Commission. We anticipate that its impact will be most pronounced in Member States where a single central authority is in charge of issuing tax rulings and tax collection (centralised model of tax administration).

Benedikt Freund, MLaw, Dr iur, Rechtsanwalt, Competition Counsel at Swiss Post, Moritz Seiler, lic iur, MSc (Oxon), Rechtsanwalt, dipl Steuerexperte, clerk to Judge Michael Beusch at the Swiss Federal Supreme Court, Lausanne. For correspondence: <> and <>.


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