Source: European Commission
“All companies, big and small, should pay their fair share of tax. If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU. It deprives the public purse and EU taxpayers of much needed funds to fight climate change, to build infrastructure, to invest in innovation.
Today’s judgments give important guidance on the application of EU State aid rules in the area of taxation. At the same time, each case has its specificities and involves complex legal questions. We will study the judgments carefully before deciding on possible next steps.
The judgments confirm that, while Member States have exclusive competence in determining their laws concerning direct taxation, they must do so in respect of EU law, including State aid rules. Furthermore, the General Court has also confirmed the Commission’s approach to assess whether a measure is selective and if transactions between group companies give rise to an advantage under EU State aid rules based on the so-called “arm’s length principle”.
The Commission will continue to look at aggressive tax planning measures under EU State aid rules to assess if they result in illegal State aid. At the same time, the ultimate goal that all companies pay their fair share of tax can only be achieved by a combination of efforts to make legislative changes, enforce State aid rules and a change in corporate philosophies. We have made a lot of progress already at national, European and global levels, and we need to continue to work together to succeed.”
The General Court today upheld the Commission’s 2015 decision finding that Luxembourg granted selective tax advantages to Fiat. On the other hand, the General Court annulled the Commission’s 2015 decision finding that the tax rulings granted by the Netherlands to Starbucks were not in line with EU State aid rules. The Commission will carefully study the judgments.