Alexander Rust (editor) - State aid and tax law

International Tax Conferences of the University of Luxembourg

VOLUME 3

General Editor

Alexander Rust

ATOZ Chair for International and European Taxation
University of Luxembourg

State Aid and Tax Law

Editiors

Alexander Rust

Claire Micheau

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eISBN 978-90-411-4625-0

2013 Kluwer Law International BV, The Netherlands

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List of Editors and Contributors

Margarida Afonso, European Commission, Legal Service, Brussels, Belgium.

Gauthier Charles de la Brousse, European Commission, Case-handler at DG Competition, Brussels, Belgium.

Humbert Drabbe, European Commission, Director at DG Competition, Brussels, Belgium.

Frank Engelen, Prof. Dr., Leiden University and partner at PwC in the Netherlands.

Joachim Englisch, Prof. Dr., University of Mnster, Germany.

Anna Gunn, PhD student at the University of Leiden, State Aid Working Group at PwC, Rotterdam, Netherlands.

Tracy A. Kaye, Professor of Law, Seton Hall University School of Law. B.S., University of Illinois; M.S.T., DePaul University; J.D., Georgetown University Law Center.

Raymond H.C. Luja, Prof. Dr., Maastricht University and Director of the Maastricht Center for Taxation; Of counsel to Loyens & Loeff N.V., Amsterdam, Netherlands

Claire Micheau, Dr.,LL.M., European Commission, Case-handler at DG Competition, Brussels, Belgium.

Anne Muller, ATOZ, Luxembourg, Luxembourg.

Keith O'Donnell, Managing partner, ATOZ, Luxembourg, Luxembourg.

Pierpaolo Rossi-Maccanico, Esq., LL.M. (NYU), European Commission, Legal Service, Brussels, Belgium.

Alexander Rust, Prof. Dr., LL.M. (NYU), University of Luxembourg, Luxembourg.

Edoardo Traversa, Prof. Dr., Catholic University of Louvain, Belgium.

Summary of Contents

Alexander Rust

Tracy A. Kaye*

Pierpaolo Rossi-Maccanico, Esq.

Margarida Afonso *

Joachim Englisch

Humbert Drabbe*

Raymond H.C. Luja

Edoardo Traversa*

Frank Engelen & Anna Gunn

Claire Micheau and Gauthier Charles de la Brousse*

Keith ODonnell & Anne Muller**

Foreword

On November 17, 2011, a much noticed Conference on State Aid and Tax Law took place in the frame of the International Tax Law series of the University of Luxembourg. This conference, which brought together experts from academia and professional practice, was very successfully organized by Alexander Rust and Claire Micheau. The written version of the contributions made on this occasion is contained in the present volume. They provide a very informative and fairly comprehensive in-depth view of the current state of discussion, under various relevant points of view. Thus, this mere foreword has little to add.

The aforementioned conference took place only two days after the judgment of the Court of Justice in joint cases C-106/09 and C-107/09 (Gibraltar case) had been delivered. In the keynote speech I had the honor to give at that conference, I at first touched upon the delicate part of a judge asked to speak on issues of judicial review. I then made some short statements on tax law related elements of the State aid notion under Article 107(1) TFEU as well as about some specific problems of recovery of indirect aid measures in the field of tax law. Now, given the thorough character of the contributions contained in the present book, I do not deem appropriate to give a full account of that keynote speech in the present foreword.

Nonetheless, even in view of the following contributions, a few particular aspects of most recent case law may seem to deserve additional attention.

As to the question of selectivity of an advantage conferred by a measure in the field of tax law, the General Court's judgment of March 7, 2012 in Case T-210/02 RENV, British Aggregates Association v. Commission, has first resumed step by step the methodology to be followed for such an assessment, as recognized by the ECJ jurisprudence (see paragraphs 4549), and then equally step by step applied this methodology to the facts of the case (see paragraphs 5192). In doing so, the General Court has made it utterly clear and undeniable, that, in reality, the central questions of whether there exists or not an advantage and whether or not an advantage is justified are nothing else but a specific variant and manifestation of the general principle of equal treatment and consequently of the general requirement of objectivity. Indeed, the steps to be followed in order to assess the selective character of a tax advantage are virtually equivalent to those for ascertaining that a legal act is violating the principle of equality: it is necessary to, first, identify the pertinent general system of legal rules (i.e., the nature and general scheme of the tax system / the common or normal regime applicable in the Member State concerned) and its extrinsic and intrinsic objectives, second, establish the existence of an effectively differentiating/unequal treatment in comparison between persons or legal entities who, in the light of the objective(s) assigned to the general system, are in a comparable legal and factual situation (i.e., the existence of an advantage granted by the tax measure at issue), and, third, ascertain whether this differentiating measure concerned is not objectively justified in the light of the objective(s) assigned to the general system (i.e., whether the tax measure is selective).

In this respect, even if the effects of a measure to be examined are of course of decisive importance for its State aid character under Article 107(1) TFEU, it must be clearly recalled and emphasized that the object and purpose of the measure are extremely important criteria for the comparability and justification of any differentiation as to the relevant factual effects (see, in this respect, also the contribution by F. Engelen & A. Gunn, Towards a Theoretical Assessment Framework, at section 9.04[C][7]).