Assessment of the European Commission's State aid law investigations in light of the latest EU Court rulings
Abstract
In 2013-2014, as part of a somewhat unexpected, genuinely well-planned series of actions, the Commission launched a series of investigations based on State aid law, focusing on tax rulings issued by Member States (mainly Benelux states and Ireland) to multinationals. The investigations were criticised not only by Member States and multinationals, but also by experts. The latter, although welcoming the Commission's investigations, pointed out that the Commission intended to use State aid law to circumvent the Member State's veto power in the area of direct taxation. In particular, the broad reference system and the use of the Commission's arm's length price were criticised. In this paper, we will examine these most controversial points in detail. Overall, we will see that, while the General Court accepted the Commission's reasoning with restrictions, the Court of Justice delivered a judgment in Fiat which, in addition to strengthening the autonomy of the Member States in the field of direct taxation, casts doubt on the sustainability of the current investigational method of the Commission. This paper therefore deals with this judgment in detail, seeking to answer the question of whether there is an alternative route for the Commission or whether it should return to legislative action.
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