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Selectivity and Proportionality: Journal Artikel

Can State Aid Control Learn from the Free Movement Rationale?

Christos Nikolaos Kalyka

European State Aid Law Quarterly, Jahrgang 22 (2023), Ausgabe 1, Seite 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

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 Artikel

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, Jahrgang 22 (2023), Ausgabe 2, Seite 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.

The Approaching Sunset of the Marketing Agreement Loophole · Case T‑79/21 Ryanair DAC and Others v European Commission · Annotation by Tamás Kende and Gábor Puskás Journal Artikel

Annotation on the Judgment of the General Court of the Court of Justice of the European Union (Ninth Chamber) of 14 June 2023 in Case T‑79/21 Ryanair DAC and Others v European Commission

Tamás Kende, Gábor Puskás

European State Aid Law Quarterly, Jahrgang 22 (2023), Ausgabe 3, Seite 329 - 336

On 14 June 2023, the General Court of the Court of Justice of the European Union delivered its judgment on the latest Ryanair case involving Montpellier airport.1 The applicants had challenged the European Commission's decision that the State provides illegal State aid not only when it orders a service at a price other than the market price, but also when it has no real need for that service, no matter how much it pays for it. The scope of application of the ‘real need’ test and criteria of the Commission’s assessment of the real needs of state entities may become a new battleground, and soon.

Spanish Goodwill – A Textbook on Material Selectivity Awaiting a Second Edition Journal Artikel

Andreas Bartosch

European State Aid Law Quarterly, Jahrgang 21 (2022), Ausgabe 1, Seite 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).

Digital Service Taxes under State Aid Scrutiny Journal Artikel

Federico Fichera

European State Aid Law Quarterly, Jahrgang 20 (2021), Ausgabe 4, Seite 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.

Andres: The Unfinished Business of a Seemingly Selective Non-Advantage· Case C-203/16 P Dirk Andres v European Commission · Annotation by Raymond Luja Journal Artikel

Annotation on the Judgment of the Court (Second Chamber) of 28 June 2018 in Case C-203/16 P Dirk Andres v European Commission

Raymond Luja

European State Aid Law Quarterly, Jahrgang 20 (2021), Ausgabe 4, Seite 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).

Progressive Turnover Taxes under the Prism of the State Aid Rules: Journal Artikel

Effective Tools to Tax High Financial Capacity or Inconsistent Tax Design Granting Selective Advantages?

Rita Szudoczky, Balázs Károlyi

European State Aid Law Quarterly, Jahrgang 19 (2020), Ausgabe 3, Seite 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.

Belgian Ports Carry Out Economic Activities and Should Be Liable to Corporate Tax · Case T-696/17 Belgian Sea Ports · Annotation by Jessica Bracker and Schéhérazade Oozeerally Journal Artikel

Annotation on the Judgment of the General Court of 20 September 2019 in Case T-696/17 Havenbedrijf Antwerpen NV and Maatschappij van de Brugse Zeehaven NV v European Commission

Jessica Bracker, Schéhérazade Oozeerally

European State Aid Law Quarterly, Jahrgang 19 (2020), Ausgabe 2, Seite 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.

Illegal Aid Grafted to Public Service Contracts · Case T-292/17 Région Île-de-France · Annotation by Jakub Kociubiński Journal Artikel

Annotation on the Judgment of the General Court (First Chamber) of 12 July 2019 in Case T-292/17 Région Île-de-France v European Commission (Bus Services)

Jakub Kociubiński

European State Aid Law Quarterly, Jahrgang 19 (2020), Ausgabe 2, Seite 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.