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Court judgments on two tax state aid cases not good for Luxembourg and Netherlands

Christian Fernsby ▼ | September 24, 2019
The General Court in Europe upheld the Commission's 2015 decision finding that Luxembourg granted selective tax advantages to Fiat.
General Court in Europe
Europe   General Court in Europe
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.

Topics: Luxembourg Netherlands state tax aid

The Commission will carefully study the judgments.

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.”