Competition Newsletter October 2019

The General Court of the European Union validates the principle of the Commission's approach in the fight against tax advantages to multinationals but orders it to be rigorous

By two decisions, Starbucks and Fiat, of September 24, 2019, the General Court of the European Union has validated the principle of the Commission's approach in its fight against the tax advantages granted to multinationals by some Member States, in the context of tax advance rulings under state aid rules. However, in the first of these decisions, the Court condemned the Commission for its lack of rigor in demonstrating the illegal aid.

The principle is established: although direct taxation falls under the sovereignty of Member States, the Commission is entitled to check that the latter do not take measures conferring any undue advantage to a company. Thus, if domestic tax legislation does not make any distinction in the treatment of the taxation of companies integrated in a group compared to