The General Court of the European Union has annulled a European Commission decision of October 2014 that declared the Spanish tax scheme on the deduction for indirect acquisitions of shareholdings in foreign companies unlawful (see EUROPE 11177/3), in a judgment handed down on Wednesday 27 September (cases T-826/14, T-12/15, T-158/15, T-252/15, T253/15, T-256/15, T-257/15, T-258/15 and T-260/15).
In July 2013, the Commission ruled that a new interpretation of the disputed tax scheme, set out in a binding opinion communicated by the Spanish authorities, was incompatible with the internal market. In two initial decisions in 2009 (see EUROPE 10008/12) and 2011 (see EUROPE 10292/24), it found that the scheme constituted unlawful state aid and required Spain to recover the aid, while authorising the scheme to be applied subject to conditions, in accordance with the principle of legitimate expectations.
In 2018, the General Court upheld both decisions (see EUROPE 12138/27).
Referred to by Spain and several of the companies concerned, the General Court upheld the actions, holding that the Commission was no longer entitled to adopt the 2014 decision, as its initial decisions already covered the acquisition of shareholdings, both direct and indirect.
According to the General Court, the Commission could not revoke its initial decisions because it had not shown that they were based on inaccurate information.
The initial decisions were also lawful decisions which conferred on Spain, subject to conditions and on account of the existence of a legitimate expectation, a subjective right to implement the aid scheme in question, even though it has been declared incompatible. Furthermore, they conferred on the undertakings benefiting from that scheme a subjective right not to have to repay certain unlawful aid.
Consequently, in the General Court’s view, by withdrawing those rights, by its 2014 decision, as regards the indirect acquisition of shareholdings, the Commission infringed the principles of legal certainty and the protection of legitimate expectations.
See the General Court’s judgment https://aeur.eu/f/8rl (Original version in French by Mathieu Bion)