OS ECJ-TF 1/2020 on the General Court Decisions of 24 September 2019 in The Netherlands v. Commission (Starbucks) (Joined Cases C-760/15 and T-636/16) and Luxembourg v. Commission (Fiat Finance and Trade) (Joined Cases T-755/15 and T-759/15), on State Aid Granted by Transfer Pricing Rulings

European Taxation, vol. 60, n. 5 (2020)

14 Pages Posted: 20 Aug 2020 Last revised: 17 Oct 2020

See all articles by João Félix Pinto Nogueira

João Félix Pinto Nogueira

International Bureau of Fiscal Documentation; University of Cape Town (UCT)

Francisco Alfredo Garcia Prats

Universitat de València

Werner C. Haslehner

Universite du Luxembourg

Volker Heydt

Independent

Eric Kemmeren

Tilburg University; Fiscal Institute Tilburg

Georg Kofler

Vienna University of Economics and Business - Institute for Austrian and International Tax Law

Michael Lang

Vienna University of Economics and Business

Jürgen Lüdicke

PriceWaterhouseCoopers LLP - PricewaterhouseCoopers GmbH

Pasquale Pistone

Vienna University of Economics and Business

Emmanuel Raingeard de la Blétière

Independent

Stella Raventos-Calvo

affiliation not provided to SSRN

Isabelle Richelle

Independent

Alexander Rust

Independent

Rupert Shiers

Independent

Date Written: January 1, 2020

Abstract

This article provides a comprehensive exame of the decisions of the EU General Court in the cases The Netherlands v. Commission (Starbucks) (Joined Cases C-760/15 and T-636/16) (hereinafter Starbucks NL) and Luxembourg v. Commission (Fiat Finance and Trade) (Joined Cases T-755/15 and T-759/15) (hereinafter Fiat), decided on 24 September 2019. These are the first in a series of expected decisions concerning the legality of the European Commission's decisions considering certain transfer pricing rulings granted by Member States to multinational enterprises (hereinafter MNEs) to constitute State aid.

The GC reached different verdicts in the two cases. Whereas in Starbucks NL it annulled the Commission's decision, in Fiat, it upheld it, ordering Luxembourg to recover the aid. Despite the different outcomes, the decisions have several commonalities in terms of how the GC interpreted the applicable European law on State aid in respect of tax matters. Therefore, they may provide an indication of how the GC will decide similar pending cases. In addition, the decisions are of paramount importance in understanding: (i) the role and limits of the Commission in reviewing rulings granted by Member States; (ii) the role of the OECD's arm's length concept and of the OECD Transfer Pricing Guidelines (2017) (the OECD Guidelines) in assessing the Treaty on the Functioning of the European Union's (TFEU) (2007) prohibition of State aid; and (iii) the level of evidence that has to be provided by the parties in these procedures.

The importance of these two decisions cannot be emphasized enough. Although the Commission has apparently decided not to appeal the Starbucks NL decision, the appellants in Fiat will do so, thus seeking a final resolution from the Court of Justice of the European Union (ECJ). The latter is not bound to follow the GC and may decide the matter on points on law in a way that deprives the current decision of its jurisprudential value. It follows that the GC would have to follow the ECJ's reasoning in future decisions as to the interpretation of EU law on State aid.

In the meantime, however, these GC decisions are the best guidelines that MNEs and Member States have (and will have in the near future) concerning the admissibility of their TP rulings in light of the EU State aid rules.

Given the length of the two decisions and the number of topics covered, the article only focuses on issues considered to be of interest in understanding the GC's reasoning and the impact of the cases.

Keywords: Taxation, Tax law, European taxation

JEL Classification: K33, K34, F13, E62, D78, E62, F02, F23, F42, H20, H22, H23, H25, H26, H87, O19, O23, O24

Suggested Citation

Pinto Nogueira, João Félix and Garcia Prats, Francisco Alfredo and Haslehner, Werner Christof and Heydt, Volker and Kemmeren, Eric and Kofler, Georg and Lang, Michael and Lüdicke, Jürgen and Pistone, Pasquale and Raingeard de la Blétière, Emmanuel and Raventos-Calvo, Stella and Richelle, Isabelle and Rust, Alexander and Shiers, Rupert, OS ECJ-TF 1/2020 on the General Court Decisions of 24 September 2019 in The Netherlands v. Commission (Starbucks) (Joined Cases C-760/15 and T-636/16) and Luxembourg v. Commission (Fiat Finance and Trade) (Joined Cases T-755/15 and T-759/15), on State Aid Granted by Transfer Pricing Rulings (January 1, 2020). European Taxation, vol. 60, n. 5 (2020) , Available at SSRN: https://ssrn.com/abstract=3644209 or http://dx.doi.org/10.2139/ssrn.3644209

João Félix Pinto Nogueira (Contact Author)

International Bureau of Fiscal Documentation ( email )

Rietlandpark, 301
Amsterdam, 1019 DW
Netherlands
+31205540100 (Phone)

HOME PAGE: http://https://www.ibfd.org/IBFD-Profiles/Jo-o-F-lix-Pinto-Nogueira

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

Werner Christof Haslehner

Universite du Luxembourg ( email )

Luxembourg

Volker Heydt

Independent

Eric Kemmeren

Tilburg University ( email )

Warandelaan 2
Tilburg, Noord-Brabant 5037AB
Netherlands
+31.13.466.8129/2412 (Phone)
+31.13.466.3073 (Fax)

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/kemmeren-3.htm

Fiscal Institute Tilburg ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31.13.466.8129/2412 (Phone)
+31.13.466.3073 (Fax)

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/kemmeren-3.htm

Georg Kofler

Vienna University of Economics and Business - Institute for Austrian and International Tax Law ( email )

Welthandelsplatz 1
Buildind D3
Vienna, VIenna 1020
Austria

Michael Lang

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Jürgen Lüdicke

PriceWaterhouseCoopers LLP - PricewaterhouseCoopers GmbH ( email )

Wirtschaftsprüfungsgesellschaf
Alsterufer 1
Hamburg, D-20354
Germany

Pasquale Pistone

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Stella Raventos-Calvo

affiliation not provided to SSRN

Isabelle Richelle

Independent

Alexander Rust

Independent

Rupert Shiers

Independent

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
727
PlumX Metrics