The Fiat Chrysler Finance Europe Case: One Step Forward Towards an Appropriate Application of the Ban on State Aid

Abstract

The judgment of the Grand Chamber of the European Court of Justice of 8 November 2022 (joined Cases C-885/19 P and C-898/19 P) marks an important point in the Court’s jurisprudence on State Aid because the principle of legality in tax matters, the attribution of competencies to the European Union, and the application of State Aid are addressed in a coordinated way. The decision clarifies that the reference system, which is relied upon to measure the actual selectivity of a national measure, must be based exclusively on the statutory law applicable at the national level, according to the principle of legality. This is a first step towards an appropriate application of Article 107 TFEU, whose application had been stretched too much in the last years. The next steps should be the overruling of Gibraltar jurisprudence and the need to limit the ban on State Aid to national measures for which evidence of actual damage to free trade between the Member States is manifest. Ban of State Aid, Selectivity, Reference system, Legality principle, Attribution of competences, Tax rulings, Arm’s length principle, Transfer pricing, Tax sovereignty, Competition, Trade between Member States