Birgit Haslinger, Elisabeth Hoffberger-Pippan

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 115 - 119

Juan Jorge Piernas López

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 274 - 281

Keywords: Regional tax on large retail establishments; Freedom of establishment; Protection of the environment and town and country planning; State aid; Selective measure; Letter from the Commission stating that no further action will be taken on a complaint; Existing aid.

Lorenzo Panci

European State Aid Law Quarterly, Volume 17 (2018), Issue 3, Page 353 - 367

The notion of material selectivity is key to defining the reach of State aid control. I will argue that the ECJ progressively endorsed an increasingly extensive interpretation of the selectivity requirement (which culminated in the Gibraltar judgment), making it easier for the European Commission to demonstrate its fulfilment. One of the consequences of this evolution was that State aid control became easier to use to pursue policy objectives. This was especially true in the context of taxation, despite the lack of harmonisation in this field. However, at the outset of the Gibraltar judgment, the General Court appeared to have taken a position that preserves the policy choices made at national level and this was possible by interpreting the selectivity condition as more difficult to fulfil. On the other hand, it appears that the Commission reacted to the Gibraltar judgment by using State aid control to pursue its policy objectives, in particular to contrast harmful tax competition among MS. Will the European Court of Justice endorse the approach taken by the Commission? Keywords: Selectivity; Gibraltar; Tax Rulings; Tax Competition.

Phedon Nicolaides

European State Aid Law Quarterly, Volume 17 (2018), Issue 3, Page 419 - 427

A tax measure is selectivity if it deviates from the reference tax system and if it cannot be justified by the logic or internal economy of the reference system. In order to determine whether a tax measure deviates from the reference system, only its effects are taken into account, not the regulatory technique used by the Member State in question Keywords: Selectivity; Reference tax system; Regulatory techniques.

Phedon Nicolaides

European State Aid Law Quarterly, Volume 17 (2018), Issue 3, Page 412 - 418

A tax measure can be selective in relation to both direct and indirect beneficiaries. A beneficiary that passes on all benefits to third parties may still derive a selective advantage. The selectivity of such advantages have to be determined on the basis of their effects, not the form of the tax. Keywords: Selectivity; Direct beneficiaries; Indirect beneficiaries; Passing on advantage.

Begoña Pérez-Bernabeu

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 582 - 597

The research focuses on the problems that the ECJ has found in recent cases at applying the classic three step selectivity test in the area of taxation. The Court is confronted with the Member States’ attempt to circumvent the State aid rules by creating ad hoc general tax systems so there is no general system against which the tax measures can be assessed. In order to avoid this circumvention, the ECJ has shifted its case law on material tax selectivity towards a new “comparability test” (also called “equality test”) based on a non-formalistic approach which takes into account the underlying objectives of the tax measure. This “comparability test” encompasses an objectives-based approach which provides Member States a higher degree of freedom. However it seems to be rather vague because it involves the difficult task of distinguishing permissible goals from impermissible goals which irretrievably leads us to a case-by-case analysis which does not provide the desirable degree of legal certainty and predictability. The main conclusion of this research is that the criterion of material tax selectivity is not definitively formulated in the ECJ case law but, on the contrary, it is open to refinements in order to meet the challenges that current and future State aid cases may raise. Keywords: Material Selectivity; Tax; Derogation; Equality Test.

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.

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.

Adrien Giraud, Sylvain Petit

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 233 - 242

In its decisional practice developing tax ruling, the European Commission uses a theoretical reasoning that can in some instances appear somewhat disconnected from the facts of the cases. Indeed, all these cases boil down to one single determination (whether the concerned transfer prices were – or not – set at market levels) and the satisfaction of all the conditions for the existence of State aid derive directly from this (rather theoretical) question alone. Little to no account taken of important factual elements (such as for example the context of international fiscal competition) and several conclusions appear to be presumed rather than demonstrated (for example the distortion of competition). One therefore remains with the general impression that State aid law remains into a sort of exception to the rest of competition law: an area of law where reality does not (really) matter. Keywords: Tax Ruling; Selectivity; Advantage; Distortion of Competition; Counterfactual.

Miguel Sampol Pucurull

European State Aid Law Quarterly, Volume 16 (2017), Issue 3, Page 431 - 438

The EU Treaties establish a system to ensure compliance of the judgments of the Court of Justice. In the area of State aid law the Court has already imposed some economic sanctions to Member States for failure to adopt the necessary measures to comply with a first judgment. In 2012 and 2014, the Spanish authorities had to adopt different measures in this area. Both cases arise different aspects concerning the recovery of State aid. The paper depicts some of the lessons and the difficulties of the implementation of both judgments. It reflects on the institutional aspects concerning the execution of Luxembourg decisions, on the role of the national judges and the public authorities which granted the aid when the implementation affects a beneficiary involved in an insolvency proceeding or on which tax scheme to apply to the beneficiary company when the previous scheme is declared illegal according to EU law. In the context of the recovery also the procedural rights and national remedies may have an effect on the compliance of EU law. Keywords: Penalty; Recovery; Spain; Magefesa; Basque Tax Incentives.