Content area
Full text
I. Introduction
A tax measure is selective in the meaning of Article 107(1) TFEU when it basically deviates from the normal tax system. In the case of a tax reduction or a tax exemption the normal system is fairly easy to define. It is the rate from which the reduction is derived or the tax from which the exemption is drawn. That is why there are very few judgments on how to determine the normal or reference tax system. A notable exception is case C‑106/09 P Commission v Gibraltar.
Yet, the determination of the reference framework is of paramount importance. See, for example, the landmark judgments in cases C-452/10 P BNP Paribas v Commission, paragraph 66; C-88/03 Portugal v Commission, paragraph 56; C-143/99 Adria-Wien Pipeline, paragraph 41.2 Nonetheless, even in these cases, it seems that the Court did not say more than that the reference system was the one identified by the Commission, that it was the normal system applicable in a region and that it was the prevailing tax measure, respectively.
The cases currently pending before the General Court concerning advance tax rulings (eg Starbucks, Fiat, etc) should hopefully provide further guidance because, despite the richness and complexity of the cases, a common element in all of them is how to define correctly the reference tax system; is it made up of the rules that apply to all companies or the rules that apply to companies seeking tax rulings?
Point 133 of the Commission’s Notice on the Notion of State Aid defines the reference system as follows: ‘The reference system is composed of a consistent set of rules that generally apply — on the basis of objective criteria — to all undertakings falling within its scope as defined by its objective.’3
This definition is not of much help when more than one set of rules may be applicable (one, of course, may argue that selectivity may exist in relation to several rules) leading to conflicting conclusions.
Indeed, the Court of Justice in its judgments of 28 June 2018 in cases C‑203/16 P Heitkamp BauHolding v Commission; C-219/16 P Lowell Financial Services v Commission; C-209/16 P Germany v Commission and C-208/16 P Germany v Commission