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The Fiat Case and a Judicial Epilogue in the Tax Rulings Saga · Joined Cases C-885/19 P, C-898/19 P Fiat Chrysler Finance Europe v Commission · Annotation by Theodoros G. Iliopoulos journal article

Annotation on the Judgment of the Court of Justice of 8 November 2022 in Joined Cases C-885/19 P and C-898/19 P Fiat Chrysler Finance Europe v Commission

Theodoros G. Iliopoulos

European State Aid Law Quarterly, Volume 22 (2023), Issue 2, Page 188 - 192

On 8 November 2022, the Court of Justice (appellate body) published its judgment in Joined Cases C‑885/19 P and C‑898/19 P that dealt with the tax ruling that Luxembourg had granted to the group Fiat Chrysler Finance Europe. The judgment annulled the Commission’s 2015 decision that found that the granting of this tax ruling constitutes illegal State aid and required Luxembourg to recover the incompatible and unlawful aid. With this judgment, the concept of ‘selectivity’ in State aid, at least with regards to tax measures, is delineated, and it is revealed to be narrower than it seemed. The arm’s length principle does not form part of State aid law, unless national law gives a concrete expression to it, and the Commission can only rely upon the principle of non-discrimination to assess the national rules that establish and determine the application of the arm’s length principle. This is the judicial epilogue of the Fiat case and of the saga of the tax rulings – unless the exact delineation of the powers of the Commission opens a new chapter in the future.

Let Down by the Facts: The General Court Annuls the European Commission Decision on Irish Tax Arrangement for Apple · Joined Cases T-778/16 and T-892/16 Ireland and Others v European Commission · Annotation by Veronika Korom journal article

Annotation on the Judgment of the General Court (Seventh Chamber, Extended Composition) of 15 July 2020 in Joined Cases T-778/16 and T-892/16 Ireland and Others v European Commission

Veronika E. Korom

European State Aid Law Quarterly, Volume 20 (2021), Issue 2, Page 277 - 283

The General Court's decision in Apple’s Irish tax case confirmed that the European Commission is competent to review national tax rulings for whether they confer a selective advantage on a tax payer. Further, the GCEU validated the legal tests on which the Commission relied in reaching its State aid decision. However, the GCEU found that the Commission had failed in its assessment of the specific facts of this case and in particular failed to show the existence of a selective advantage. It therefore annulled the Commission’s decision. Given that the GCEU ruled in favour of the Commission on virtually all points of law but censured the Commission on questions of fact, the Commission’s appeal to the CJEU is likely to face significant challenges on both admissibility and substance.

The Rise of an (Autonomous) Arm’s Length Principle in EU State Aid Rules? journal article

Fausta Todhe

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 249 - 263

In its recent State aid Decisions, the Commission claimed that an (autonomous) arm’s length principle, independent from the one originating in the OECD framework, is embedded in Article 107(1) TFEU as a tool to ensure the protection of the principle of equality. Considered a novelty, the Commission’s approach has been challenged not only by the appeals submitted from the interested parties but also from a number of practitioners and academics. Although the last words remain still with the Courts, the purpose of this article is to join the debate and bring a personal view on the matter. It therefore reviews the recent State aid Decisions on individual aid in order to determine the potential embedding of an (autonomous) arm’s length principle in European State aid law. Keywords: Fiscal State aid; Arm’s length principle; Tax rulings

Whether or Not to Bite the Apple: Some Implications of the August 2016 Commission Decision on Irish Tax Benefits for Apple journal article

Eugene Stuart

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 209 - 232

Every State aid regulatory decision in the EU has political, economic and administrative dimensions in addition to the application of legal rules and principles. The Apple Decision of August 2016, imposing a record recovery order against Ireland, is no exception. In the context of the use of the EU State aid rules to promote fair tax competition, and contribute indirectly to failed tax harmonisation, this article looks in detail at the Apple Decision together with its implications in the context of EU State aid and taxation policy and some of the sensitive political repercussions arising from the Decision. State aid in the EU via tax measures continues to represent about one-third of all State aid. Accordingly, it is also topical and useful to explore the logic and motivation of the European Commission in treating tax measures as liable to give rise to State aid concerns (and as priority and major cases) in the context of the Apple Decision and the soft law measures, Commission decisions and case law which preceded it. The case is currently on appeal and, although the Irish arguments do not seem strong at first sight, on several points the position of the Apple entities and of the Irish tax authorities will need to be analysed in detail by the Court in response to the Irish arguments and there is likely to be some scope for certain Commission positions in the case to be over-turned on points of fact, if further proven in the appeal. In reviewing the Apple Decision, the EU Courts will soon have an important (or even historic) opportunity to decide whether or not to further support the legality of the Commission’s continuing expansion of its State aid remit in regard to allegedly unfair tax measures. Keywords: Tax Rulings; Unfair Tax Competition; Tax Harmonisation; Arm’s Length Principle; Record State Aid Recovery.

The State Aid Cases of Starbucks and Fiat: New Routes for the Concept of Selectivity? journal article

Theodoros Iliopoulos

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 263 - 271

The European Commission’s decisions in the State aid cases of Starbucks and Fiat are the first decisions in the series of the tax rulings investigations. These decisions have been criticised as excessively widening the scope of the concept of selectivity. This article, however, argues that the Commission did not overreach itself. The Commission applied a well-established methodology and integrated certain new elements into it, like the arm’s length principle, in order to respond to novel issues. This stance does not indicate a tendency towards widening the concept of selectivity; it rather signifies the Commission’s disposition to focus on the effects of the aid measures and to conduct its assessments with less formalism. Keywords: Fiat; Starbucks; Concept of Selectivity; Transfer Price Rulings; Arm’s Length Principle.

Is Belgium and Forum 187 v. Commission a Suitable Legal Source for an EU "At Arm’s Length Principle"? journal article

Tony Joris, Wout De Cock

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 607 - 616

This article revisits the facts and merits of the Belgium and Forum 187 v. Commission judgment of the European Court of Justice. The European Commission refers to this 2006 judgment to justify the use of an at arm’s length principle in its controversial State aid decisions on advance pricing agreements. We will argue that the European Court of Justice did not intend to establish and endorse such principle in this judgment and that the Commission therefore overstretches the impact of this judgment. Keywords: Belgium; Forum 187; Coordination Centres; Advance Pricing Agreements; At Arm’s Length Principle.

State Aid and Tax Rulings - the Commission’s Approach to Virtual Payments: Equal Treatment of Multinationals? journal article

Steven Verschuur, Melina Stroungi

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 598 - 606

In its Working Paper on State aid and tax rulings, the European Commission suggests that tax rulings allowing for tax deductions without a corresponding cash payment could be contrary to the principle of equal treatment under Article 107(1) of the TFEU. This position appears to be inconsistent with the approach that the Commission itself has followed in a number of recent decisions on fiscal State aid. In our view, the principle of equal treatment, as interpreted by the Commission, does not prohibit Member States from applying such tax deductions, but actually requires them to do so in certain circumstances. The Commission’s stance on this issue seems to confuse the arm’s length principle with certain types of anti-abuse rules, thereby opening the door to direct challenges under State aid rules against mismatches between tax systems of different countries. This could lead to a regulatory overreach without a legal basis. Keywords: Tax Rulings; Virtual Payments; Multinationals; At Arm’s Length Principle.

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