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Archive for October 21st, 2015

A first reaction on the Starbucks and Fiat State aid decisions

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I’m typing as I listen to Commissioner Vestager live at the press conference announcing the decisions considering the tax rulings granted by the Netherlands and Luxembourg to Starbucks and Fiat as illegal State aid.

I have just read the press release and, whereas it might not seem to be saying much on the legal issues, it actually does trigger a few thoughts; for now let me just address one:

Does selectivity have anything to do with ideal economic reality?

According to the press release, the rulings at issue are considered “selective” (a necessary requirement for State aid to exist) because they endorsed “artificial and complex methods” and “do not reflect economic reality”.

Under EU law, at least until now, selectivity was assessed by comparing whether a public measure treats some companies differently than others by deviating from the ordinary way of doing things.

Never before -and we have done quite a lot of tax State aid cases- have I seen a measure considered selective on the basis of a comparison not with how things are normally done , but with an ideal reconstructed method of how things should have been done.

To be continued…

Written by Alfonso Lamadrid

21 October 2015 at 10:59 am

Posted in Uncategorized