In my introductory chapter last year (“Fiscal State aid: the Kraken Wakes?”), I wrote about a slumbering monster whose existence had barely been detected for many years but was now threatening to wreak havoc on well-established tax practices and principles. The threat is becoming ever more apparent, especially in Germany and the UK, but the monster is also beginning to encounter real resistance. Here, then, is “Fiscal State aid: Part II”. Although the UK’s Brexiteers have shown no interest in the subject, this is one imposition that can definitely be sourced to the EU, and specifically the European Commission. The prohibition on State aid is contained in the main EU Treaty and is an understandable adjunct to the single market, designed to prevent Member States favouring domestic businesses (or inward/outward investment more generally). But in the past few years the Commission has shown that legislation and rulings in the tax sphere may be vulnerable in a way that would once have been unimaginable.
This article appeared in the 2019 edition of The International Comparative Legal Guide to: Corporate Tax, published by Global Legal Group Ltd, London
