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State Aid and Tax Rulings

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State Aid and Tax Rulings

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State Aid and Tax Rulings

  1. 1. State Aid and Tax Rulings Kelly Stricklin-Coutinho Barrister, 39 Essex Chambers Visiting Lecturer, King’s College London
  2. 2. What is State Aid? • A form of competition law • EU law is supreme over domestic law • Principle of subsidiarity v general measures • Subject to general principles of EU law
  3. 3. What is State Aid? Article 107 TFEU “Save as otherwise provided…any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings…in so far as it affects trade between Member States, be incompatible with the internal market”
  4. 4. What is State Aid? Article 107 TFEU • any aid • granted by a Member State or through State resources • which distorts or threatens to distort competition • favouring certain undertakings • affects trade between Member States
  5. 5. What is State Aid? Article 107(2) TFEU – compatible aid • Social character, granted to individual consumers, without discrimination • Make good damage from natural disasters or exceptional occurrences • Areas of Germany affected by division of Germany; in order to compensate for economic disadvantages of division
  6. 6. What is State Aid? Article 107(3) TFEU – may be compatible • Promote economic development – abnormally low standard of living or serious underemployment • Execution of project of common European interest; remedy a serious disturbance in the economy • Development of certain economic activities • Promote culture and heritage
  7. 7. What is State Aid? Article 108 TFEU • Commission to keep under constant review existing aid • Power to decide that the State abolishes or alters aid • Can refer to the CJEU if the State does not • The Council may unanimously agree that aid is compatible • The Commission shall be informed of plans to grant or alter aid
  8. 8. What is State Aid? Consequences of State Aid • 10 year recovery period • Compound Interest • Formal defences: absolutely impossible to recover, de minimis threshold, general principles of EU law • Challenge to state aid ruling • Challenge to recovery ruling
  9. 9. Application to Tax • Aggregates Levy • Gibraltar • UK Patent Box
  10. 10. Application to Tax - EU • Adria-Wien Pipeline (C-143/99) • Commission v Gibraltar/UK (C-106/09 & C- 107/09) • Autogrill (T-290/10) • Banco Santander (T-399/11)
  11. 11. Tax Rulings • Apple, Amazon, Starbucks, Fiat • Ireland, Luxembourg, the Netherlands • All EU Member States • Lux Leaks (Market Information)
  12. 12. Tax Rulings • Apple, Amazon, Starbucks, Fiat • Ireland, Luxembourg, the Netherlands • All EU Member States • Lux Leaks (Market Information)
  13. 13. Tax Rulings – What now? • Historic Rulings and Settlements – Companies involved in leaks – Companies not involved in leaks with rulings or settlements • Current Rulings and Settlements • Forward Looking
  14. 14. Evidence • Selectivity • Advantage • Competition/Trade
  15. 15. Achieving Certainty No safe harbour • Rigorous approach to documents • Test in litigation
  16. 16. Questions? Kelly Stricklin-Coutinho ksc@39essex.com Thirty Nine Essex Street LLP is a governance and holding entity and a limited liability partnership registered in England and Wales (registered number0C360005) with its registered office at 39 Essex Street, London WC2R 3AT Thirty Nine Essex Street's members provide legal and advocacy services as independent, self-employed barristers and no entity connected with Thirty Nine Essex Street provides any legal services. Thirty Nine Essex Street (Services) Limited manages the administrative, operational and support functions of Chambers and is a company incorporated in England and Wales (company number 7385894) with its registered office at 39 Essex Street, London WC2R 3AT

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