On 24 September 2019, the General Court delivered its first two judgements in the series of appeals against European Commission (EC) decisions on tax rulings ordering Member States to recover millions of euros on the basis of state aid rules. In October 2015, the EC ruled that selective tax benefits were granted to Fiat in Luxembourg and to Starbucks in the Netherlands. On the basis of these decisions both companies were required to refund around EUR 30 million to the respective Member States. Both companies and Member States filed appeals against the EC's decisions.

On appeal, the Court annulled the Starbucks decision and dismissed the appeal against the Fiat decision. Even though one of the EC's decisions was struck down, the judgments are still seen as a victory for the EC. The Court confirmed that the EC is entitled to examine tax rulings' compliance with EU state aid rules and to assess them against an international transfer pricing standard, known as the “arm's length principle.”

The Starbucks annulment illustrates the strict standard of economic evidence that is required from the EC to prove that an advantage was granted. According to the judgment it is not sufficient for the EC to merely show non-compliance with the methodological requirements of the arm's length analysis; it would also have to prove that these errors led to a reduction of the tax burden. This cannot be presumed. The EC is therefore required to compare the position of the recipient as a result of the tax ruling with his position in the absence of such a ruling to show that an advantage has been granted.

On 8 October 2019, in her hearing in the European Parliament committees Commissioner-designate Vestager stated that she would request Member States to hand over information on all of their special tax agreements. This shows her willingness to continue scrutinizing tax planning measures under the state aid rules.

Link to the judgments: Starbucks and Fiat.