The Increasing Link Drawn By Regulators Between State Aid & Taxation Systems

In 2018, the European Commission (EC) concluded two more investigations into whether the tax ruling practices of Member States breached European Union (EU) State aid rules: the first, a finding of unlawful State aid resulting from tax rulings by Luxembourg in favor of Engie; the second, a rare finding of no aid in respect of the treatment by Luxembourg of McDonald's under the Luxembourg-U.S. double taxation treaty. These decisions are discussed below.

The Increasing Link Drawn by Regulators Between State Aid & Taxation Systems

The EC also had a success in the General Court, which ruled in a series of cases that the EC was right to find that a particular measure for the amortization of financial goodwill under the Spanish tax regime was selective in nature and amounted to incompatible State aid.¹