A mixed day for European commission at EU general court on taxation of large companies

On Tuesday 24th the European general court has handed down both defeat and victory to the European commission.

Verdicts were delivered in two cases where the commission has alleged that EU member states have offered so generous tax regime that it amounted to illegal state aid. The European commission has thus demanded that both companies, Fiat and Starbucks pay additional taxes. The general court has agreed in the case of Fiat but disagreed in the case of Starbucks.

These cases are important because of the monetary amount at stakes, which amounts to something between 20 and 30 million euros from each company. What is at stake is how much power in this area the commission has, how far can it probe taxes in member states.

These two cases were watched also as a forerunner, to the much bigger case of Apple taxation regime in Ireland, with court watchers expecting these cases to shed light on how that lawsuit is going to be resolved. That certainly has not happened, and we must also bear in mind, that decisions of the general court can be appealed to the EU court of justice.