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Taxation, State Aid Rules and Arbitral Courts: journal article

A BIT of a Mess in the Micula Saga

Begoña Pérez Bernabeu

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 329 - 338

In its long-awaited ruling on 18 June 2019, the General Court (GC) annulled the Commission's State aid Decision in the Micula case where the Commission considered that the damages payment by Romania of an ICSID award constituted State aid. In the GC's opinion, the payment of the adverse arbitration award by a Romania does not constitute illegal State aid. Unfortunately, the GC's reasoning is tied to the timing of the measure taken by Romania, which took place before Romania acceded to the EU, and the rest of the compelling substantive pleas were not assessed. Moreover, the GC did not rule on whether the compensation of the withdrawal of the tax incentives for the post-accession period constitutes State aid given that the Commission failed to distinguish between compensation for the period predating accession and post-accession. For this reason, this judgment does not put an end to the Micula saga as long as the Commission has lodged an appeal before the Court of Justice. Keywords: arbitral award, Bilateral Investment Treaty (BIT), repeal of tax incentives, damages compensation, enforcement


The Swedish Aviation Tax: journal article

Some Initial Comments from a State Aid Perspective

Yvette Lind

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 290 - 296

The article concerns the Swedish aviation tax which was introduced in 2018. A tax policy approach is applied to not only consider tax technicalities but also the ideals and goals of the tax from the perspective of the Swedish legislature. Resulting in an inclusion of not only legal aspects but also a consideration of how politics and economics influences the design of such a tax. The author concludes that there are several potential State aid problems with the present design of the tax, eg too low tax rates in order to fulfil its environmental policy objective, an exemption of transit and transfer passengers that distorts the competition between airlines and which is not justified or exempted from State aid rules. Keywords: aviation taxes, fiscal State aid, emission offsetting, carbon offset, polluter pays principle, Sweden



Turnover-based Taxes in EU State Aid Control: The ‘Hypothecation Test’ and Its Relationship with Free Movement · Cases C-75/18 Vodafone Magyarország, C-323/18 Tesco-Global Áruházak and C‑482/18 Google Ireland · Annotation by Irene Agnolucci journal article

Annotation on the Judgments of the Court of Justice of the European Union (Grand Chamber) of 3 March 2020 in Cases C-75/18 Vodafone Magyarország, C-323/18 Tesco-Global Áruházak and C‑482/18 Google Ireland

Irene Agnolucci

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 193 - 198

The turnover-based taxes imposed by Hungary on Vodafone, Tesco and Google are found not to be State aid by the CJEU. Indeed, the Court states that a taxpayer cannot rely on the argument that the exemption enjoyed by other taxpayers constitutes State aid, in order not to pay a tax. Nevertheless, instead of relying on the criteria enshrined in Article 107 TFEU, in order to constitutes State aid the relevant test to pass is whether a tax is directly hypothecated to an aid measure. Furthermore, the three judgments touch upon the relationship between State aid control and the free movement provisions. Although the issue is not openly addressed by the Court, the two sets of rules are analysed concurrently rather than alternatively. As for the analysis on the free movement, the Court finds that the establishment of a steeply progressive tax does not discriminate per se between home companies and the ones established abroad and thus the Hungarian law complies with EU law.


Assessing the Standard of Proof in Fiscal State Aid journal article

Red Card to the Commission

Begoña Pérez Bernabeu

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 447 - 457

The General Court annulled the Commission’s Decision qualifying as State aid a tax regime granted by Spain to certain Spanish professional football clubs (namely, FC Barcelona, Real Madrid FC, Athletic Bilbao and Club Atlético Osasuna). The General Court took the view that the Commission had not proven that the tax regime had the effect of conferring an actual economic advantage on these four clubs. This judgment is highly significant because, without ruling on most of the substantive issues of the Case, it is the first time that criteria on the burden and standard of proof incumbent on the Commission are so clearly stated, particularly in the field of State aid. Moreover, this General Court’s approach is supported by recent and later Case law under which the Commission is required to carry out a complete analysis of all the factors that are relevant to the measure at issue. Keywords: Burden of proof; Standard of proof; Tax advantage; Football; Sports.


Special Charges, Free Movement and State Aid journal article

The Negative State Aid Approach

Guilherme Galdino

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 510 - 518

Given that special charges have not been addressed properly, one intends to answer whether it is better to consider the aid as the non-imposition or the tax exemption, or as the tax itself. To address this issue, the cumulative application of free movement of rights and State aid rules is examined, mainly, in light of the possible consequences. Not only is the concept of negative State aid discussed, but also the legal reasoning and consequences appropriate to its application are analysed. The author argues that State aid rules should, by analogy, be applied to special charges, considering the tax itself the aid because: the selective analysis is maintained; it is possible to define an appropriate remedy; and it can be applied to situations involving also free movement rights. Keywords: Special Charges; Negative State aid; Asymmetrical taxes.



Where are the Limits of the Commission’s Suspension Injunctions?  · Joined Cases T-554/15 and T-555/15 Hungary v Commission · Annotation by Péter Staviczky journal article

Annotation on the judgment of the General Court (ninth chamber) of 25 April 2018 in Joined Cases T-554/15 and T-555/15 Hungary v Commission.

Péter Staviczky

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 61 - 70

In April 2018, the General Court issued the first ever judgment in EU law dealing with the legal requirements for applying injunctions in State aid cases, more specifically suspension injunctions. The Commission rarely uses these measures; therefore it is beneficial to know how the EU judicature sees the legal boundaries of these legal concepts and where the limits for the Commission are to use them properly.


Can Selectivity Result from the Application of Non-Selective Rules? journal article

The Case of Engie

Phedon Nicolaides

European State Aid Law Quarterly, Volume 18 (2019), Issue 1, Page 15 - 28

This paper identifies a significant shift in the approach for determining whether a tax measure is selective. The European Commission, in its decisions on tax rulings, has found that the selective nature of the rulings stemmed from the fact that they endorsed arrangements whose terms deviated from those that would have been agreed under normal conditions of competition. Unlike its other decisions on tax rulings, the Commission in the Engie case does not examine whether Engie benefitted from treatment that was not available to other companies. Instead, the Commission bases its finding of selectivity on the fact that Engie minimised its tax liability. This is an ‘outcome-based’ approached rather than a ‘treatment-based’ approach which requires comparison between companies in similar situations. Without a benchmark of comparison, an outcome-based approach is meaningless. In addition, the Commission breaks new ground by finding a selective advantage in favour of Engie in the non-enforcement by Luxembourg of anti-abuse rules. The Commission asserts that Luxembourg should have refused to issue the tax ruling. Keywords: Selectivity; tax rulings; anti-abuse rules.


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


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