# C_2012039EN.01001601.xml

| 11.2.2012 | EN | Official Journal of the European Union | C 39/16 |
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11.2.2012

EN

Official Journal of the European Union

C 39/16

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Action brought on 2 December 2011 — Garner CAD Technic and Others v Commission

(Case T-614/11)

(2012/C 39/33)

Language of the case: German

Parties

Applicants: Garner CAD Technic GmbH (Weßling, Germany), GCT Design Organisation GmbH (Weßling), SG Aerospace GmbH (Weßling) (represented by: R. Zehetmeier-Müller, M. Schweda, C. Wünschmann, F. Loose, I. Dörr and J. Eggers, lawyers)

Defendant: European Commission

Form of order sought

| — | annul the decision of the European Commission of 26 January 2011, C(2011) 275, on State aid C 7/2010 (ex CP 250/2009 and NN 5/2010) implemented by Germany ‘KStG, Sanierungsklausel’ (‘Law on corporation tax, provision enabling the fiscal carry forward of losses to allow for the restructuring of companies in difficulty’) (OJ 2011 L 235, p. 26); |
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annul the decision of the European Commission of 26 January 2011, C(2011) 275, on State aid C 7/2010 (ex CP 250/2009 and NN 5/2010) implemented by Germany ‘KStG, Sanierungsklausel’ (‘Law on corporation tax, provision enabling the fiscal carry forward of losses to allow for the restructuring of companies in difficulty’) (OJ 2011 L 235, p. 26);

| — | order the defendant to pay the costs. |
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order the defendant to pay the costs.

Pleas in law and main arguments

In support of the action, the applicants rely in essence on the following pleas in law:

| 1. | First plea in law, alleging infringement of Article 107(1) TFEU: the provision enabling the fiscal carry forward of losses is not State aid
  The applicants submit in this connection inter alia that the provision enabling the fiscal carry forward of losses in Paragraph 8c(1a) of the German Körperschaftsteuergesetz (KStG) (Law on corporation tax) does not have the selective effect required by Article 107(1) TFEU as it does not favour certain undertakings or the production of certain goods. In addition, the applicants take the view that the provision enabling the fiscal carry forward of losses does not constitute an exception to the reference system under German tax law of the fundamentally unrestricted carry forward of losses and the transfer of losses between different tax periods, but helps to give effect to that reference system. |
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1.

First plea in law, alleging infringement of Article 107(1) TFEU: the provision enabling the fiscal carry forward of losses is not State aid

The applicants submit in this connection inter alia that the provision enabling the fiscal carry forward of losses in Paragraph 8c(1a) of the German Körperschaftsteuergesetz (KStG) (Law on corporation tax) does not have the selective effect required by Article 107(1) TFEU as it does not favour certain undertakings or the production of certain goods. In addition, the applicants take the view that the provision enabling the fiscal carry forward of losses does not constitute an exception to the reference system under German tax law of the fundamentally unrestricted carry forward of losses and the transfer of losses between different tax periods, but helps to give effect to that reference system.

| 2. | Second plea in law, alleging infringement of Article 107(1) TFEU: Absence of selectivity as there is no differentiation between economic operators who are in a comparable factual and legal position as regards the objective pursued
  The applicants submit in that regard that the provision enabling the fiscal carry forward of losses favours all undertakings which have the legal form of a corporation under the same conditions and without any scope for discretion. The applicants take the view that the provision enabling the fiscal carry forward of losses is a general fiscal policy measure, which for that reason is not subject to the prohibition on aid. |
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2.

Second plea in law, alleging infringement of Article 107(1) TFEU: Absence of selectivity as there is no differentiation between economic operators who are in a comparable factual and legal position as regards the objective pursued

The applicants submit in that regard that the provision enabling the fiscal carry forward of losses favours all undertakings which have the legal form of a corporation under the same conditions and without any scope for discretion. The applicants take the view that the provision enabling the fiscal carry forward of losses is a general fiscal policy measure, which for that reason is not subject to the prohibition on aid.

| 3. | Third plea in law, alleging infringement of Article 107(1) TFEU: the provision enabling the fiscal carry forward of losses is justified on the basis of the general scheme of the German tax system
  In this connection the applicants submit that even if the Commission’s view were to be accepted and it were to be assumed that the provision enabling the fiscal carry forward of losses is selective in nature, the selectivity would be justified on the constitutional principles of taxation according to ability to pay, the prevention of excessive taxation and respect for the principle of proportionality. |
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3.

Third plea in law, alleging infringement of Article 107(1) TFEU: the provision enabling the fiscal carry forward of losses is justified on the basis of the general scheme of the German tax system

In this connection the applicants submit that even if the Commission’s view were to be accepted and it were to be assumed that the provision enabling the fiscal carry forward of losses is selective in nature, the selectivity would be justified on the constitutional principles of taxation according to ability to pay, the prevention of excessive taxation and respect for the principle of proportionality.

| 4. | Fourth plea in law, alleging infringement of Article 107(1) TFEU: there are no subsidies from State resources to the applicants
  The applicants submit that there have been no subsidies from State resources to them. In that regard they submit inter alia that the provision enabling the fiscal carry forward of losses does not confer a new financial advantage on the loss-bearing corporation, but merely maintains an already existing financial position, which is established according to the principle of the unrestricted carry forward of losses and the transfer of losses between different tax periods. |
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4.

Fourth plea in law, alleging infringement of Article 107(1) TFEU: there are no subsidies from State resources to the applicants

The applicants submit that there have been no subsidies from State resources to them. In that regard they submit inter alia that the provision enabling the fiscal carry forward of losses does not confer a new financial advantage on the loss-bearing corporation, but merely maintains an already existing financial position, which is established according to the principle of the unrestricted carry forward of losses and the transfer of losses between different tax periods.

| 5. | Fifth plea in law, alleging manifest errors of assessment on the basis of insufficient consideration of the position under German tax law
  The applicants submit in that regard inter alia that the Commission failed to have regard to the relevant provisions of German tax law and that the contested decision therefore contains serious errors. |
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5.

Fifth plea in law, alleging manifest errors of assessment on the basis of insufficient consideration of the position under German tax law

The applicants submit in that regard inter alia that the Commission failed to have regard to the relevant provisions of German tax law and that the contested decision therefore contains serious errors.

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