Three Years of EU State Aids Review of Tax Rulings: Taking Stock

In 2013, the European Commission started investigating tax ruling practices of Member States under the EU State aid rules. The investigations so far led to three decisions and several guidelines. But appeals are pending and the boundaries of EU law in this area remain unsettled. Three years on, we take stock of developments. As the Commission has repeatedly stated, tax rulings as such are perfectly legal provided they comply with EU State aid rules. But when does a tax ruling constitute State aid? Considering the severe financial consequences of a finding of illegal and incompatible State aid– such as the recovery of any tax savings obtained over the previous ten-year period—the answer to this question is crucial for groups doing business in Europe.