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Corporate Tax Arrangements Under EU State Aid Scrutiny journal article

The Application of the Market Economy Operator Principle

James Kavanagh, Nicole Robins

European State Aid Law Quarterly, Volume 14 (2015), Issue 3, Page 358 - 370

In 2014 the European Commission began in-depth State aid investigations into the corporate tax affairs of well-known multinational companies—Amazon, Apple, Fiat Finance and Trade, and Starbucks. In late 2014, the Commission announced that it was also investigating tax rulings agreed by all EU Member States between 2010 and 2013. In the course of the investigations, the Commission has indicated that the market economy operator principle (MEOP) should be applied to assess whether companies’ corporate tax arrangements are market-conforming. The MEOP test appears to have been applied by assessing whether the methods used to allocate profit between subsidiaries of the same corporate group are on an arm’s-length basis. Although the OECD has set out guidelines on how to apply the arm’s-length principle, as discussed in this article, the Commission appears to regard conformity with the OECD’s guidance as not necessarily sufficient to demonstrate compliance with the MEOP. This article discusses how lessons from other areas of competition law and from regulated industries, supported by economic and financial analysis, can provide valuable insights into the application of the MEOP test to assess whether companies’ corporate tax arrangements are market-conforming. Keywords: Advantage, Selectivity


The General Court’s Interpretation of the MEIP in the Banking Sector journal article

Emily Adler, James Kavanagh

European State Aid Law Quarterly, Volume 9 (2010), Issue 4, Page 949 - 954

I. Introduction In March 2010, the General Court issued two judgments in relation to investment fund contributions made by the German state (Land) of Hessen to Landesbank Hessen-Thüringen Girozentrale (Helaba).2 In both cases, the Court found that the Commission had been correct in its application of the market economy investor principle (MEIP) when finding that the assets made available to Helaba to underpin its competitive business do not const

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