Forum: AG Kokott Tries to Bring Clarity to the Selectivity Test for Individual Tax Rulings

Abstract

In an opinion of 4 May 2023 in Case C-454/21 P, Engie, Advocate General Kokott proposes a new standard of state aid review of individual tax measures such as the tax rulings, based on a manifestly erroneous application of tax law (favourable to the taxpayer) by the national tax administration. Considering that, in order to assess the selective nature of tax rulings, only national law must constitute the frame of reference and that in any event, only tax rulings that are manifestly erroneous with regard to national law can constitute a selective advantage, Advocate General Kokott has called on the Court to annul the Commission’s decision finding that Luxembourg granted the Engie group unlawful state aid in the form of tax advantages, as well as the judgment of the General Court. State aid control, direct taxation, notion of selective advantage, Commission practice, aggressive tax planning, individual tax rulings, tax system of reference, comparability, Union Courts review, annulment of Commission decision