On 14 February 2019, the EU General Court annulled the Commission’s State aid decision of 11 January 2016 on Belgian excess profit rulings on the formal ground that the Belgian rules did not constitute an aid scheme (as opposed to individual measures). The General Court did not address the pleas addressing the findings of selectivity and of an advantage. The Commission had ordered recovery of the alleged aid from dozens of multinationals simultaneously (see our earlier tax flash here) through deciding that the Belgian excess profit ruling measures formed an aid scheme.
State aid is defined as a measure granted by the State or through State resources, which distorts or threatens to distort competition and affects intra-EU trade by favouring certain undertakings or the production of certain goods. Measures meeting these criteria may constitute an aid scheme in particular in the case they do not need further implementing measures and define beneficiaries in a general and abstract manner.
The General Court first dismissed the plea that the Commission had encroached on Belgium’s tax sovereignty, including the competence to adopt measures to prevent double taxation, as the measure did not appear to pursue that objective. It thereby confirmed the right of the Commission to examine the compatibility of tax rulings under State aid rules.