Tax Legislation and the Notion of Fiscal Aid – A Review of Five Years of European Jurisprudence

19 Pages Posted: 22 Dec 2015

See all articles by Wolfgang Schoen

Wolfgang Schoen

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law

Date Written: December 22, 2015

Abstract

State aid discipline under Art.107, 108 TFEU has established itself as a major constraint to the tax sovereignty of national legislators. By analyzing a great number of CJEU judgments delivered during the last five years, this article lays out both the conceptual and the political issues which arise when tax benefits are subject to control under European competition law. This affects the concepts of “advantage”, “selectivity” and “discrimination” as well as special cases like “negative state aid”, “indirect selectivity” or “de-facto selectivity”. The author proposes to apply Art.107 par.1 TFEU only if a tax provision deviates beneficially from a “normal” or “benchmark” treatment and rejects the trend to interpret Art.107 par.1 TFEU as a general ban on discrimination. Moreover, this article pleads for a limited reading of “selectivity” which is only given when a tax advantage confers a financial benefit on certain branches of the economy or certain individualized enterprises.

JEL Classification: F23, H25, K34

Suggested Citation

Schön, Wolfgang, Tax Legislation and the Notion of Fiscal Aid – A Review of Five Years of European Jurisprudence (December 22, 2015). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2015-14. Available at SSRN: https://ssrn.com/abstract=2707049 or http://dx.doi.org/10.2139/ssrn.2707049

Wolfgang Schön (Contact Author)

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law ( email )

Marstallplatz 1
Munich, 80539
Germany

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