On Wednesday 25 July, the judges of the Court of Justice of the European Union (CJEU), ruling on case C-128/16 P, overturned the judgment of the General Court of the European Union overturning the Commission’s decision finding that the ‘Spanish tax lease system’ (STLS) constituted unlawful state aid.
In May 2006, the Commission received the first of several complaints against the STLS, which was created in 2002 and allowed shipping companies to benefit from a 20% to 30% reduction in price for the purchase of ships built by Spanish shipyards, thereby harming shipyards of other member states.
The STLS was based on an ad hoc legal and financial structure organised by a bank acting as an intermediary between a maritime shipping company and a shipyard. It involved a leasing company and an economic interest company (EIG) in the sale. Through financial mechanisms, tax advantages were generated by five Spanish tax measures and shared between investors and the shipping company, effectively constituting a rebate on the price of the vessel.
On 17 July 2013, the Commission took the view that three of the five fiscal measures were incompatible with EU State aid rules and ordered some of the money in question to be recovered from the investors (see EUROPE 10890).
Spain and the private entities then appealed against this decision before the General Court, which found in their favour on 17 December 2015 (see EUROPE 11457), whereupon the Commission appealed to the CJEU to have the latter judgment overturned.
In its judgment, the CJEU overturns the judgment of the General Court. First of all, the judges considered that the General Court had committed an error of law by concluding that EIGs cannot be the beneficiaries of State aid on the grounds of their economic activity. Having observed that the General Court’s assessment was based on this incorrect premiss, it concluded from this that its decision was incorrect.
Finally, the judges of the Court of Justice disagree with the General Court’s assessment that the Commission’s decision is vitiated by a failure to state reasons or by contradictory reasoning.
The case has therefore been referred back to the General Court. (Original version in French by Lucas Tripoteau)