#62023CC0737Opinion of Advocate General Kokott – Court of Justice of the EU
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This opinion addresses the legal assessment of tax practices related to state aid in Belgium, specifically focusing on the excess profit exemption granted to multinational companies. The Advocate General examines whether the European Commission and EU courts are bound by a member state's interpretation of its national tax law, especially if that interpretation deviates from the law's wording. It concludes that the tax practice in question was inconsistent with the law and constituted unlawful state aid under EU rules.
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Key Changes
- The opinion clarifies the relationship between EU law and national tax law interpretations.
- It addresses the legality of an excess profit exemption implemented by Belgium.
- It indicates that certain tax practices may constitute unlawful state aid.
Obligations
What this law requires
Member States must not implement tax practices that deviate from the wording of national tax law provisions, even if based on established administrative interpretation or practice
Tax authorities must ensure that advance tax rulings under Article 185(2)(b) of national tax codes are applied consistently with the arm's length principle as stated in the law's wording, not alternative interpretations
Member States must base corporate income tax assessments on actual profit realized by companies (reflecting actual ability to pay), not on hypothetical average profits of comparable standalone companies, unless explicitly authorized by law
The European Commission and EU Courts are not bound by a Member State's interpretation of national tax law when that interpretation is inconsistent with the provision's wording in assessing compliance with State aid rules
Member States must recover unlawfully granted tax aid from beneficiary companies, with a definitive list of beneficiaries to be compiled by the Member State