Favourable Tax Regimes that Constitute Selective State Aid from the Perspective of the Cjeu Recent Case-Law

I. Bumane, D.Vodolagins
European Research Studies Journal, Volume XX, Issue 3A, 231-245, 2017
DOI: 10.35808/ersj/706


The issue of state aid is crucial for the EU Member States that are implementing favorable tax regimes to foster investments and business activities performed by their tax resident companies. Up until recently, according to the General Court of the Court of Justice of the European Union (hereinafter - CJEU), where the European Commission (EC) has been assessing whether a specific tax measure qualifies as a state aid, it had been required to prove that such measure favors certain undertakings capable of identification because of characteristics specific to them that other undertakings do not possess. This approach has changed by the Judgment of the Court of Justice delivered on 21 December 2016 in joined cases C-20/15 P and C-21/15 P with which the EC burden of proof has been substantially eased in classifying measure at issue as selective.The aim of the research is, by researching the reasoning behind the conclusion reached by the Court of Justice and jurisprudence on fiscal state aid, to evaluate whether any fiscal measure introduced in the future that is not exempt under de minimis provision or other exemptions eventually may be classified as selective.Main research methods are legal theory research as well as applied law reform research. Theoretical research underlying the paper is focused on the analysis of the CJEU case-law related to the judgment, as well as the analysis of related publications and opinions, whereas the applied law research includes the analysis of social and economic impact of the CJEU and EC position on state aid in fiscal measures. The findings of the research determine to what extent the EC will have more leeway in investigations into state aid tax measures as it will not have to identify a specific category of beneficiaries. In its conclusion, the paper addresses the question of whether the EU Member States may practically in the future implement any fiscal favorable regime (and maintain existing ones) without a risk of the regime at issue being classified as selective.

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