In 2018, the European Commission adopted a Decision concluding that the Luxembourg tax authorities had granted incompatible state aid to the Engie Group in connection with tax rulings on intra-group financing transactions.
Following an action for annulment of the Commission’s decision before the General Court, which was dismissed, Engie appealed the judgment of the General Court in front of the Court of Justice (ECJ). In a judgment rendered today, the ECJ has held that the Commission had erred in identifying the reference system constituting the starting point for the comparative examination to be carried out in the assessment of the selectivity of tax measures. In particular, the reference system identified by the Commission did not include the provisions laying down the possible derogations to that system.
Furthermore, the Court found that the Commission had also erred in rejecting the interpretation of national provisions put forward by Luxembourg and had made errors in its various analyses of selectivity. Those errors vitiated the entire analysis of selectivity and the 2018 Commission Decision was therefore annulled.
For further information: see Court’s Press Release and Judgment (only available in French at time of publication)