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.

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.