Christos Nikolaos Kalyka

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 42 - 54

This article reviews the interaction between EU State aid control and free movement law. A critical assessment of the case-law suggests that both regimes contribute to the attainment of similar goals: the establishment of an undistorted market. Their complementary interplay suggests that some principles from the case law on free movement can be used as an interpretative tool in relation to State aid, especially in the assessment of material selectivity. Accordingly, the extent to which State aid control can assess the competence of Member States to pursue national objectives is explored. National objectives can be pursued, provided the measures incorporating them are consistent with the objective pursued. The assessment of consistency in essence adopts elements of the principle of proportionality which is used under free movement law and therefore it does not prevent the ability of Member States to promote national interests, rather it assesses the coherence of the regulatory standard used for the promotion of the objective. Keywords: selectivity; proportionality; national objectives; consistency

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.

Andreas Bartosch

European State Aid Law Quarterly, Volume 21 (2022), Issue 1, Page 65 - 71

The Spanish Goodwill saga which has covered more than a decade of fluctuating litigation before the EU Courts has certainly made many of the different shades of the notion of material selectivity visible, some of which it moulded, some of which it re-affirmed. In this it will certainly go down in State aid history as a remarkable piece of jurisprudence. What it has not managed, glady so, is to end the magical mystery material selectivity surrounds itself with. And the latter is very much a blessing to our future debates and discussions.Keywords: Spanish Goodwill; material selectivity; taxMilestones Preview: this article is based on a chapter in the upcoming second edition of the book 'Milestones in State Aid Case Law' (Lexxion 2022).

Raymond Luja

European State Aid Law Quarterly, Volume 20 (2021), Issue 4, Page 578 - 584

The Andres judgement has often been seen as a Milestone on selectivity, but in essence it is not. It rather deals with the absence of an advantage. In this contribution the author revisits Andres and concludes that, from a transactional perspective set forth in Sigma Alimentos Exterior, the outcome could well have been different. He also points out that Andres opened up a loophole to the state aid regime that could be exploited by providing targeted relief to over-inclusive anti-abuse measures. He concludes that it is primarily up to national legislators and domestic courts to guard against disproportional tax measures. Milestones Preview: this annotation is based on a chapter of the upcoming second edition of the book 'Milestones in State Aid Case Law' (Lexxion 2022).

Federico Fichera

European State Aid Law Quarterly, Volume 20 (2021), Issue 4, Page 479 - 491

Digital companies, on which contemporary economies are largely based, rely heavily on intangible assets and data processing. They are also able to carry out their activity without a physical presence in the market, which creates a separation between the country where these companies make their profits and the country in which those profits are taxed. It has thus become important to develop an efficient strategy to tax these operators. In 2018, the European Union made an attempt to do so and the Commission introduced a proposal for a directive on the introduction of a Digital Service Tax (DST). Due to lack of the required unanimity in Council, such a proposal was not adopted. In the meantime, however, some Member States have introduced their own national DSTs, clearly inspired by the Commission's proposal. This paper investigates whether such fiscal measures constitute State aid and, in light of recent case-law, it concludes that this is probably not the case. However, in consideration of the peculiarities of such taxes, it is argued that they might still be found to trigger Article 107(1) TFEU in accordance with said jurisprudence. From a broader perspective, it is also argued that the approach used by the CJEU when ruling on fiscal aid should be less formalistic and should give more consideration to the potential effect that these could have on competition within the Internal Market. Keywords: Digital Service Tax; digital taxation; Fiscal State aid; GAFA; selectivity.

Caroline Buts, Malgorzata Agnieszka Cyndecka, José Luis Buendía

European State Aid Law Quarterly, Volume 20 (2021), Issue 3, Page 397 - 426

Rita Szudoczky, Balázs Károlyi

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 251 - 270

Turnover-based progressive taxes are increasingly popular among the Member States. However, these taxes raise concerns regarding their compatibility with the EU State aid rules. Although there are multiple State aid concerns that deserve attention depending on the actual design of such taxes, the core issue is whether the ability to pay principle can serve as a legitimate objective underpinning turnover taxes and thus justify the different treatment of high-turnover and low-turnover undertakings. This question requires the careful assessment of de facto selectivity because in the case of progressive turnover taxes potential selectivity could only arise from the general construct of the tax in the absence of a derogation from a reference system. This article proposes an alternative test for the de facto selectivity boiling down in essence to the examination of the consistency of the tax. Furthermore, it analyses digital turnover taxes for their consistency with their declared objectives. Finally, the article explores how the Court’s unnecessarily strict approach to the admissibility of State aid questions in preliminary ruling procedures when the main proceeding concerns an individual tax notice could be eased.

Jessica Bracker, Schéhérazade Oozeerally

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 212 - 219

The Case T-696/17 Belgian Sea Ports relates to an action for annulment introduced by the port authorities of Antwerp and Bruges against the European Commission Decision 2017/2115 which found that Belgian port operators had benefited from incompatible State aid through an exemption from corporate tax. This case is of interest in that it sheds light on the difficulties of establishing that an entity is not an ‘undertaking’ in circumstances where the latter performs mixed activities which are both economic and non-economic in nature. Moreover, it provides yet another confirmation that the application of the ‘three step’ analysis for the assessment of selectivity is not always a straightforward exercise. Lastly, it confirms that an aid beneficiary cannot rely on an unlawful aid received by a third party to allege a breach of the principle of equal treatment.

Jakub Kociubiński

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 199 - 204

The subsidy scheme for certain transport undertakings in Île-de-France has been found by the European Commission to be unlawful State aid but ultimately compatible with the Internal Market. Yet, breach of the obligation to notify, declared in the Commission's decision, have resulted in its repeal by national courts and with subsequent adoption of a recovery order of previously received subsidies. Which in turn has led to (unsuccessful) action for the annulment of the Commission's decision in an attempt to eliminate the original legal basis for recovery. The following issues were raised: grounds for classifying a measure as new aid; extent of the obligation to state reasons; the fulfilment of selectivity and advantage criteria.

Hans Arno Petzold

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 161 - 164

The European Commission has put forward a proposal for a Council regulation aimed at ‘temporary Support to mitigate Unemployment Risks in an Emergency (SURE) following the COVID-19 outbreak’. This is not the place to discuss political or financial implications of the idea of a Basic European Unemployment Insurance. But it gives the opportunity to have a look at options for short-time work compensation, based on a case study of the German model, and the State aid relevance of such compensation. Keywords: COVID-19, SURE Initiative, short-time work Ccmpensation, State aid, selectivity, Germany