# C_2010179EN.01005402.xml

| 3.7.2010 | EN | Official Journal of the European Union | C 179/54 |
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3.7.2010

EN

Official Journal of the European Union

C 179/54

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Action brought on 14 May 2010 — Autogrill España v Commission

(Case T-219/10)

(2010/C 179/93)

Language of the case: Spanish

Parties

Applicant: Autogrill España, SA (Madrid, Spain) (represented by: J. Buendía Sierra, E. Abad Valdenebro, M. Muñoz de Juan and R. Calvo Salinero, lawyers)

Defendant: European Commission

Form of order sought

| — | that the pleas for annulment contained in the application be admitted and upheld; |
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that the pleas for annulment contained in the application be admitted and upheld;

| — | that Article 1(1) be annulled in so far as it states that Article 12(5) of the Amended Law on Corporation Tax (TRLIS) contains elements of State aid; |
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that Article 1(1) be annulled in so far as it states that Article 12(5) of the Amended Law on Corporation Tax (TRLIS) contains elements of State aid;

| — | in the alternative, that Article 4 be annulled in so far as it makes the recovery order applicable to transactions which were completed prior to the publication, in the Official Journal of the European Union, of the final decision which is the subject-matter of this action; and |
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in the alternative, that Article 4 be annulled in so far as it makes the recovery order applicable to transactions which were completed prior to the publication, in the Official Journal of the European Union, of the final decision which is the subject-matter of this action; and

| — | that the Commission be ordered to pay the costs. |
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that the Commission be ordered to pay the costs.

Pleas in law and main arguments

The contested decision in the present case finds the aid scheme introduced by Spain, in accordance with Article 12(5) TRLIS, incompatible with the common market, as regards aid granted to beneficiaries to make intra-Community acquisitions. In that regard, it states that the aforementioned provision allows for the deduction for tax purposes of amortization of the financial goodwill resulting from a foreign shareholding acquisition of greater than 5 %.

In support of its claims, the applicant submits the followings pleas:

| 1. | The contested decision infringes Article 107(1) TFEU in that it finds that the measure at issue constitutes State aid. The applicant contends, in that regard, that the Commission has not proved that the tax measure examined favours ‘specific undertakings or the production of specific goods’, as required under Article 107(1) TFEU. The Commission merely assumes that the measure is selective on the basis of the fact that it applies only to the acquisition of shareholdings in foreign companies and not in domestic companies. The applicant considers that reasoning to be erroneous and circular: the fact that application of the measure examined — as for any other tax rule — depends on the fulfilment of certain objective requirements does not render it, in law or fact, a selective measure. In fact, the mechanical nature of the Commission’s reasoning would result in every tax measure being considered to be prima facie selective.
  For the sake of completeness, both a legal analysis of the measure, and the statistics produced by the Kingdom of Spain, show that Article 12(5) TRLIS is a general measure open, in law and fact, to all undertakings which are subject to Spanish corporation tax irrespective of their size, nature, sector or origin.
  Second, the prima facie different treatment under Article 12(5) TRLIS, far from constituting a selective advantage serves to place all transactions for the acquisition of shares on an equal tax footing, be those shares national or foreign; as, if, owing to the impossibility to complete cross-border mergers, the amortization of financial goodwill can only be carried out at a national level to the extent that there are rules in the tax system which allow it, Article 12(5) TRLIS does no more than extend that possibility to the purchase of shares in foreign companies.
  In the alternative, the Commission’s decision is disproportionate, since, its application in cases where control is taken of foreign undertakings should be, at least, equivalent to cases of national mergers and therefore justified by the nature and broad logic of the Spanish system. |
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1.

The contested decision infringes Article 107(1) TFEU in that it finds that the measure at issue constitutes State aid. The applicant contends, in that regard, that the Commission has not proved that the tax measure examined favours ‘specific undertakings or the production of specific goods’, as required under Article 107(1) TFEU. The Commission merely assumes that the measure is selective on the basis of the fact that it applies only to the acquisition of shareholdings in foreign companies and not in domestic companies. The applicant considers that reasoning to be erroneous and circular: the fact that application of the measure examined — as for any other tax rule — depends on the fulfilment of certain objective requirements does not render it, in law or fact, a selective measure. In fact, the mechanical nature of the Commission’s reasoning would result in every tax measure being considered to be prima facie selective.

For the sake of completeness, both a legal analysis of the measure, and the statistics produced by the Kingdom of Spain, show that Article 12(5) TRLIS is a general measure open, in law and fact, to all undertakings which are subject to Spanish corporation tax irrespective of their size, nature, sector or origin.

Second, the prima facie different treatment under Article 12(5) TRLIS, far from constituting a selective advantage serves to place all transactions for the acquisition of shares on an equal tax footing, be those shares national or foreign; as, if, owing to the impossibility to complete cross-border mergers, the amortization of financial goodwill can only be carried out at a national level to the extent that there are rules in the tax system which allow it, Article 12(5) TRLIS does no more than extend that possibility to the purchase of shares in foreign companies.

In the alternative, the Commission’s decision is disproportionate, since, its application in cases where control is taken of foreign undertakings should be, at least, equivalent to cases of national mergers and therefore justified by the nature and broad logic of the Spanish system.

| 2. | Infringement of Article 107(1) TFEU resulting from an error of law in identifying the beneficiaries of the measure.
  In the alternative, although it considers that Article 12(5) TRLIS contains elements of State aid, the Commission ought to have carried out an exhaustive economic analysis to ascertain who the beneficiaries of the aid scheme were. The applicant claims, in any event, that the beneficiaries of the aid (in the form of an inflated purchase price for the shares) were those selling the shares and not, as the Commission alleges, the Spanish firms who applied that measure. |
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2.

Infringement of Article 107(1) TFEU resulting from an error of law in identifying the beneficiaries of the measure.

In the alternative, although it considers that Article 12(5) TRLIS contains elements of State aid, the Commission ought to have carried out an exhaustive economic analysis to ascertain who the beneficiaries of the aid scheme were. The applicant claims, in any event, that the beneficiaries of the aid (in the form of an inflated purchase price for the shares) were those selling the shares and not, as the Commission alleges, the Spanish firms who applied that measure.

| 3. | Lastly, the applicant claims breach of the principle of protection of legitimate expectations with respect to the breadth of the temporal scope of the recovery order. |
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3.

Lastly, the applicant claims breach of the principle of protection of legitimate expectations with respect to the breadth of the temporal scope of the recovery order.

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