EU State Aid Law Research Articles

The Media Pluralism Principle, The Financing of Public Broadcasters, and EU Law

AbstractIn the rise of authoritarian trends in Hungary and in Poland, public broadcasters play a crucial role in supporting the political forces in power. There are many examples which show how public broadcasters influence public opinion by selective coverage and distorted remit. While the problem of media plurality is often commented upon from the perspective of fundamental rights or the rule of law, another relevant perspective is that of internal market and economic law. The article analyses how can one make sure that the use of public funds to support State media does not lead to the distortion of citizens’ rights to be informed. The article argues that the current EU State Aid framework allows the balance of Member States’ prerogatives in respect to media freedom and content with the risk of EU-imposed censure. The article analyses the place of media pluralism in EU law and demonstrates that media pluralism has been integrated within the internal market framework, including an analysis of recent amendments to the Audiovisual Media Services Directive. Then, it focuses on the relationship between media pluralism, public service broadcasting and EU State aid law.

EU State Aid Law: Current Challenges and Developments

EU State Aid Law: Current Challenges and Developments

Judgment By Formula: Regulatory Form and the Differentiation of Fiscal Measures and Non-Fiscal Measures in EU State Aid Law

Judgment By Formula: Regulatory Form and the Differentiation of Fiscal Measures and Non-Fiscal Measures in EU State Aid Law

Book Review: The Future of EU State Aid Law, Consolidation and Expansion by Juan Jorge Piernas López, Leigh Hancher, Luca Rubini (eds)

Book Review: The Future of EU State Aid Law, Consolidation and Expansion by Juan Jorge Piernas López, Leigh Hancher, Luca Rubini (eds)

CFE Helsinki Tax Conference 2023: Summary Report on “Evolution or Devolution in the EU State Aid Judicial Practice and Impact of Digitalisation on Tax Practice”

In this note, the authors review the key points discussed at the CFE Professional Affairs Conference 2023 held in Helsinki, Finland on 21 September 2023, including enforcement of EU (State aid) law vis-à-vis aggressive tax planning practices, tax administration 3.0 and the current and expected developments in EU and international tax policy.

The transformation of EU State aid law … and its discontents

This article analyses the main goals of the 2012 State Aid Modernization (SAM) reform in light of the recent case law of the Court of Justice of the European Union in the State aid field.The article concludes that the Court has adopted a principled approach towards the State aid discipline, including the definition of aid – notably in fiscal cases –, the assessment of compatibility, and the exceptions from the obligation to notify new aid. This approach constitutes a reminder that, despite recent policy initiatives, the main features of the original Treaty system of State aid control have not changed. The case law studied also shows that the SAM initiative has brought, alongside many positive effects, a number of less satisfactory consequences. Finally, the case law examined is liable to limit the effects of the first two SAM objectives while, in parallel, reinforcing the third. State Aid Modernization, assessment of compatibility, exemptions, SAM objectives

The role of third parties in the enforcement of the Foreign Subsidies Regulation: complaints, participation, judicial review and private enforcement

This article analyses the role of third parties in the enforcement of the Foreign Subsidy Regulation (FSR). It focuses on competitors, customers, and suppliers – market participants directly affected by distortive foreign subsidies – as a special form of third parties. Third parties might have a vested interest in the enforcement of the FSR against subsidy beneficiaries because they could be affected by the distortive effects of foreign subsidies. Third parties may also be of value in the FSR enforcement through detection, involvement in Commission procedures, or through private enforcement measures. Consequently, the article investigates complaints, participation in Commission FSR proceedings, judicial review, and private enforcement in national courts. It draws some conclusions and comparisons with third party enforcement in other areas of EU law, notably EU State aid, competition, merger control and trade law, but it works out the unique approach for third party enforcement of the FSR. Despite the FSR’s gap-filling function, it deviates significantly from third party enforcement in other areas of EU law, as it only provides limited options for such third-party enforcement.

Aufbau eines fondsbasierten „Generationenkapitals“ – staats- und unionsrechtliche Zulässigkeit der Rentenfinanzierung über einen Aktienfonds

Abstract The establishment of a sovereign wealth fund to build up “generational capital” is associated with legal imponderables. In principle, the German federal state can set up a foundation under public law to operate the fund with resources allocated to it as loans from the federal budget. However, if the federal state itself takes out loans to finance the foundation, this would be problematic from a constitutional point of view. As far as the protection of fair competition is concerned, it is unlikely that the fund will be systemically relevant and thus benefit from an implicit state guarantee. However, care must be taken to ensure that the fund receives its resources from the federal budget on market terms and that the resources supplied to the fund are also used on market terms. Otherwise, serious problems would arise under EU state aid law. The fact that the fund acts in the interests of the pension insurance scheme would not allow for an exception or justification.

On the Qualification of Municipal Authorities as Undertakings · Case C-656/20 P Hermann Albers eK v European Commission · Annotation by Anna Panarella

On 24 March 2022 the Court of Justice of the European Union (CJEU) in Case C-656/20 P Hermann Albers v European Commission issued a ruling on whether the transfer of public funds between public authorities constitutes State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union. The main issue underpinning this case is the qualification of the municipal transport authorities receiving funds as ‘regulators’ or ‘undertakings’ in light of their ownership interests in local transport enterprises. The case provides an opportunity to investigate the boundaries of the notion of ‘undertaking’ under EU competition and State aid law. To this end, the analysis focuses, on the one hand, on the constitutive elements of the notion at issue, and, on the other hand, it takes into consideration the notion of ‘emanation of a State’ that can be used for the correct qualification of complex entities performing multiple activities at the same time. The analysis shows that State ownership alone has no bearing on whether a certain public entity qualifies as an undertaking or not.

Belgian Courts and the Enforcement of EU State Aid Law:

Belgian Courts and the Enforcement of EU State Aid Law:

Compensation or Competitive Advantage? Reconciling Investment Arbitration with EU State Aid Law

Abstract —International investment law and EU State aid law have clashed on multiple occasions, most famously in the Micula case but also in disputes over subsidies in the renewable energy sector. In the view of the European Commission, investors should not be able to use investment arbitration to obtain compensation for the withdrawal of unlawful State aid, as this would jeopardize the effectiveness of EU State aid law. For this reason, the Commission has intervened in numerous investment arbitrations, arguing that investors cannot have legitimate expectations in respect of State aid that was granted in violation of EU law, and that any compensation awarded by a tribunal in such circumstances would also constitute State aid. This article argues that while EU State aid law should inform an assessment of the investor’s legitimate expectations, tribunals need to conduct a comprehensive evaluation that also considers other relevant factors, such as the respondent State’s representations and the foreseeability of the State aid qualification. If a tribunal determines that an investor was entitled to legitimate expectations despite EU State aid law, any compensation awarded by the tribunal should be accepted as damages that fall outside the scope of EU State aid law. In this way, a conflict between the two fields of law, which only encourages investors to seek enforcement outside the European Union, can be avoided.

EU Proposal on Digital Service Tax in View of EU State Aid Law

This contribution deals with the European Commission’s proposal on the taxation of digital services. The main aim of the contribution is to confirm or disprove the hypothesis that the Digital Service Tax constructed in line with the proposition of the European Commission does interfere with EU state aid law. The research is conducted by applying basic methods of legal science, especially the method of scientific analysis and case law analysis.

EU State Aid Law and the Northern Ireland Protocol: Extension of the Acquis and the ‘Effect on Trade’

EU State Aid Law and the Northern Ireland Protocol: Extension of the Acquis and the ‘Effect on Trade’

Critical Analysis of the General Court’s ‘EU Arm’s Length Tool’: Beware of the Reflexivity of Transfer Pricing Law!

The ‘EU arm’s length principle’ gradually evolved into an ‘EU arm’s length tool’ in the Starbucks, Fiat, Apple, and Amazon judgments of the General Court of the European Union (‘GC’). This contribution analyzes in detail why a ‘principle’ progressed into a ‘tool’ in these judgments. For this matter, it considers the arm’s length standard from the point of view of the regulation strategy of states (i.e., a reflexive regulation strategy) to govern the taxation of multinational companies. The author maintains that the regulatory design of the arm’s length standard entails a choice for ‘reflexive transfer pricing law’ and subsequently relies on that perspective for analyzing the judgments of the GC. This angle meticulously illustrates that the abuse of discretionary powers by the tax authorities in the process of monitoring the residual profit allocation of the taxpayer constitutes the relevant state aid problem. The contribution concludes that the GC eventually devised a rather toothless ‘tool’ that does not properly address this issue. At the same time, it also concludes that it should be relatively straightforward for the Court of Justice EU to finetune the ‘EU arm’s length tool’ in order to establish an effective and foreseeable reconciliation of EU state aid law and transfer pricing law. For this matter, the contribution puts forward a concrete recommendation. EU fiscal state aid control, EU state aid law, EU arm’s length principle, EU arm’s length tool, transfer pricing, residual profit allocation, APA, Apple

General Principles in EU State Aid Law

General Principles in EU State Aid Law

Compensation or Competitive Advantage? Reconciling Investment Arbitration with EU State Aid Law

Compensation or Competitive Advantage? Reconciling Investment Arbitration with EU State Aid Law

Progressive turnover-based tax systems and EU state aid law: Case C-562/19 P Commission v. Poland and Case C-596/19 P Commission v. Hungary

In Commission v. Poland (C-562/19) and Commission v. Hungary (C-596/19) the Court of Justice of the European Union ruled that progressive tax systems based on turnover do not by definition provide selective advantages to undertakings with lower turnovers in violation of EU state aid law. The European Commission had declared a Polish tax on retailers and a Hungarian tax on advertisement incompatible with Article 107(1) TFEU because the progressive, turnover-based taxes favoured undertakings with smaller turnovers over those with larger turnovers. The General Court annulled both Commission decisions because such advantages were inherent to the content and objectives of the general tax system, which was for Poland and Hungary to define. The Court of Justice dismissed the appeals by the Commission, affirming that Member States are free, in line with their fiscal autonomy, to opt for a progressive and/or turnover-based tax system. While turnover-based corporate taxation may have market-distortive effects, the Court was right to dismiss the Commission's appeals. The principles of fiscal autonomy and legal certainty require an assessment of selectivity in light of Member States’ own definition of the content and objectives of their tax systems.

Designing Aviation Taxes Within the EU

This Article focuses on environmental taxes, specifically aviation taxes, and the challenges and limitations EU law imposes on individual EU Member States when they attempt to enforce both national and international environmental policy goals. Both the former Irish and the recently implemented Swedish aviation tax are used as comparative examples when chartering and discussing what (legal) obstacles are posed by EU law and, subsequently, the options available to individual Member States when attempting to design and implement environmental taxes. Further, common political obstacles are addressed in the Swedish and Irish case studies to further enhance the understanding of why and how aviation taxes are designed the way they generally are. A holistic approach, resulting in the inclusion of not only tax law and environmental law elements but also EU free movement law and EU state aid law in parallel legal systems (at domestic level and EU level) is applied to provide a more coherent and transparent outlineof the studied matter. The Article affords, through a tax technical study combined with environmental and economic theories, a conceptual framework on how an aviation tax may be designed to fulfil environmental goals and generate tax revenues while still complying with EU law. The Article comprises differing methods in calculating CO2 emission offsetting. Calculating factual taxation of individual flightsoffers the reader further understanding of the polluter-pays principle and present (in)efficiency of aviation taxes at Member State level. Despite the Article only covering aviation taxes applied within the EU, these discussions are of great relevance to scholars outside of the EU considering the increasing interest in climate law and the potential of environmental taxes when pursuing climate goals at both national and international levels. Additionally, policy discussions will only become more relevant over time due to ongoing environmental discussions and the implementation and enforcement of the UN’s sustainability goals.

A Tale of Two Brothers and Two Legal Orders: Investment Arbitration and EU State Aid Law

This article deals with the relation between investment arbitration and EU State aid law. Investment arbitration is a mechanism for settling investor-State disputes under an investment treaty. Such treaties offer assurances of regulatory stability that may come into conflict with EU State aid law. However, investment arbitration is regulated by international treaties that do not form part of the EU legal order. This has not prevented the European Commission from vigorously asserting the primacy of Union law, especially in relation to investment arbitration awards between two EU parties. This interaction between two parallel legal orders, with no clear hierarchical relation between them, has given rise to conflicting decisions and jurisdictional claims, with no clear solution in sight.

Turnover Taxes, the Fight for the National Tax Base and the EU Court of Justice: An Undeserved Triumph for Member State Direct Tax Autonomy?

The additional taxation of corporate turnover has emerged in the EU Member States and at the EU level as part of efforts to secure the national tax base and presumably to enable a fair and equitable sharing of the tax burden among corporate taxpayers covered by the national tax jurisdiction. Its introduction is usually based on the expectation that such taxation enables the exercise of taxing rights over value generated in the national analogue and digital economy when the traditional taxation of corporate income seems to fail in achieving the same. However, turnover taxes are problematic tax instruments from a legal perspective and their lawfulness is debatable as a matter of both EU and national law. After years of contestation before the European Commission and the courts of the EU based on EU internal market and State aid law, it has been revealed that EU law is not available to challenge some of the fundamental problems with the regulation of turnover taxes. As the law now stands, there is a possibility that in this area of taxation Member States can get away with misrepresenting their intentions and abusing their taxing rights in this way. This latter issue must not be overlooked when addressing the non- or under-taxation of corporate taxpayers in the national and the European economy. turnover taxation, digital taxes, national tax base, Member State tax policy autonomy, discrimination, abuse of taxing rights