# C_2020036EN.01003401.xml

| 3.2.2020 | EN | Official Journal of the European Union | C 36/34 |
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3.2.2020

EN

Official Journal of the European Union

C 36/34

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Action brought on 8 November 2019 – Imperial Brands and Others v Commission

(Case T-760/19)

(2020/C 36/42)

Language of the case: English

Parties

Applicants: Imperial Brands plc (Bristol, United Kingdom), Imperial Tobacco Ltd (Bristol), Imperial Tobacco Overseas Holdings Ltd (Bristol), Imperial Tobacco Holdings Ltd (Bristol), Imperial Tobacco Overseas Holdings (2) Ltd (Bristol) (represented by: D. Slater, lawyer, and E. Burrows, N. Gardner and S. Mardell, Solicitors)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should:

| — | annul the contested decision C(2019) 2526 Final of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption; |
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annul the contested decision C(2019) 2526 Final of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption;

| — | in any event, order the Commission to pay the applicants’ costs and expenses in connection with these proceedings. |
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in any event, order the Commission to pay the applicants’ costs and expenses in connection with these proceedings.

Pleas in law and main arguments

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

| 1. | First plea in law, alleging that the Commission has failed to state adequate reasons and has erred in law and/or made a manifest error of appraisal in the application of Article 107(1) TFEU by finding that the UK's controlled foreign companies (CFC) rules are the relevant reference system. The Commission should have treated the reference framework as the UK's corporation tax regime. |
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1.

First plea in law, alleging that the Commission has failed to state adequate reasons and has erred in law and/or made a manifest error of appraisal in the application of Article 107(1) TFEU by finding that the UK's controlled foreign companies (CFC) rules are the relevant reference system. The Commission should have treated the reference framework as the UK's corporation tax regime.

| 2. | Second plea in law, alleging that the Commission erred in law in its application of Article 107(1) TFEU and/or made a manifest error of appraisal by adopting a flawed approach to the analysis of the CFC rules. The Commission wrongly treated the provisions of Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 – which contains the Group Financing Exemption – as a form of derogation from a general charge to tax found in Chapter 5 of Part 9A of the Taxation (International and Other Provisions) Act 2010. |
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2.

Second plea in law, alleging that the Commission erred in law in its application of Article 107(1) TFEU and/or made a manifest error of appraisal by adopting a flawed approach to the analysis of the CFC rules. The Commission wrongly treated the provisions of Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 – which contains the Group Financing Exemption – as a form of derogation from a general charge to tax found in Chapter 5 of Part 9A of the Taxation (International and Other Provisions) Act 2010.

| 3. | Third plea in law, alleging that the Commission erred in law in its application of Article 107(1) TFEU in finding that the Group Financing Exemption was selective in that undertakings in factually and legally comparable positions were treated differently. |
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3.

Third plea in law, alleging that the Commission erred in law in its application of Article 107(1) TFEU in finding that the Group Financing Exemption was selective in that undertakings in factually and legally comparable positions were treated differently.

| 4. | Fourth plea in law, alleging that the Commission erred in law in finding that the Group Financing Exemption gives rise to an advantage within the meaning of Article 107(1) TFEU. |
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4.

Fourth plea in law, alleging that the Commission erred in law in finding that the Group Financing Exemption gives rise to an advantage within the meaning of Article 107(1) TFEU.

| 5. | Fifth Plea in law, alleging that the Commission has failed to state adequate reasons in finding that the Group Financing Exemption was partially not justified and has therefore breached Article 296 TFEU. |
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5.

Fifth Plea in law, alleging that the Commission has failed to state adequate reasons in finding that the Group Financing Exemption was partially not justified and has therefore breached Article 296 TFEU.

| 6. | Sixth plea in law, alleging that the ‘full’ exemption under section 371IB of the Taxation (International and Other Provisions) Act 2010 is justified by the nature and overall structure of the tax system. |
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6.

Sixth plea in law, alleging that the ‘full’ exemption under section 371IB of the Taxation (International and Other Provisions) Act 2010 is justified by the nature and overall structure of the tax system.

| 7. | Seventh plea in law, alleging that the 75 % exemption under section 371ID of the Taxation (International and Other Provisions) Act 2010 is justified by the nature and overall structure of the tax system. |
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7.

Seventh plea in law, alleging that the 75 % exemption under section 371ID of the Taxation (International and Other Provisions) Act 2010 is justified by the nature and overall structure of the tax system.

| 8. | Eighth plea in law, alleging that the imposition of a tax burden on CFCs meeting the conditions for the Group Financing Exemption would breach the applicants’ freedom of establishment contrary to Article 49 TFEU. |
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8.

Eighth plea in law, alleging that the imposition of a tax burden on CFCs meeting the conditions for the Group Financing Exemption would breach the applicants’ freedom of establishment contrary to Article 49 TFEU.

| 9. | Ninth plea in law, alleging that the Commission erred in law in applying by analogy or placing undue reliance upon the terms of the Council Directive (EU) 2016/1164, (1) which was not applicable ratione temporis. |
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9.

Ninth plea in law, alleging that the Commission erred in law in applying by analogy or placing undue reliance upon the terms of the Council Directive (EU) 2016/1164, (1) which was not applicable ratione temporis.

| 10. | Tenth plea in law, alleging that in adopting the contested decision the Commission encroached on the United Kingdom's exclusive sovereignty in the area of direct taxation and thereby breached Articles 4 and 5 TEU and Article 114 TFEU. |
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10.

Tenth plea in law, alleging that in adopting the contested decision the Commission encroached on the United Kingdom's exclusive sovereignty in the area of direct taxation and thereby breached Articles 4 and 5 TEU and Article 114 TFEU.

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(1)  Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ 2016 L 193, p. 1).

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