Judgment;Information — ECLI:EU:T:2023:567
Date: 2023-09-20
Language of the case: English
Court formation: Second Chamber, Extended Composition
Subject matter: State aids;Competition
Procedure: Action for annulment - unfounded;Action for annulment - decision unnecessary
Origin: Belgium

JUDGMENT OF THE GENERAL COURT (Second Chamber, Extended Composition) 20 September 2023 (*) (State aid – Aid scheme put into effect by Belgium – Decision declaring the aid scheme incompatible with the internal market and unlawful and ordering recovery of the aid granted – Tax ruling – Taxable profit – Excess profit exemption – Advantage – Selectivity – Recovery) In Cases T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16, Capsugel Belgium, established in Bornem (Belgium), applicant in Case T‑266/16, VF Europe BVBA, established in Bornem, applicant in Case T‑324/16, Belgacom International Carrier Services, established in Brussels (Belgium), applicant in Case T‑351/16, Zoetis Belgium, established in Ottignies-Louvain-la-Neuve (Belgium), applicant in Case T‑363/16, Ineos Aromatics Ltd, formerly BP Aromatics Ltd, established in Geel (Belgium), applicant in Case T‑371/16, Eval Europe NV, established in Zwijndrecht (Belgium), applicant in Case T‑388/16, represented by C. Borgers, B. Buytaert and H. Vanhulle, lawyers, v European Commission, represented by P.‑J. Loewenthal, B. Stromsky and F. Tomat, acting as Agents, defendant, THE GENERAL COURT (Second Chamber, Extended Composition), composed of A. Marcoulli, President, S. Frimodt Nielsen, V. Tomljenović (Rapporteur), R. Norkus and W. Valasidis, Judges, Registrar: S. Spyropoulos, Administrator, having regard to the written part of the procedure, in particular: – the decision of 16 February 2018 to stay the proceedings pending the decisions closing the proceedings in the cases that gave rise to the judgment of 14 February 2019, Belgium and Magnetrol International v Commission (T‑131/16 and T‑263/16, EU:T:2019:91), and to the judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741), – the decision of 26 April 2022 to resume the proceedings, – the written questions put by the Court to the parties and their replies to those questions, having regard to the order of the President of the Second Chamber, Extended Composition, of 21 December 2022 joining Cases T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16 for the purposes of the oral part of the procedure, further to the hearing on 15 February 2023, gives the following Judgment 1 By their actions under Article 263 TFEU, the applicants – in Case T‑266/16, Capsugel Belgium; in Case T‑324/16, VF Europe BVBA; in Case T‑351/16, Belgacom International Carrier Services; in Case T‑363/16, Zoetis Belgium; in Case T‑371/16, Ineos Aromatics Ltd; and in Case T‑388/16, Eval Europe NV – seek the annulment of Commission Decision (EU) 2016/1699 of 11 January 2016 on the excess profit exemption State aid scheme SA.37667 (2015/C) (ex 2015/NN) implemented by Belgium (OJ 2016 L 260, p. 61; ‘the contested decision’). I. Background to the dispute 2 The facts of the dispute and the legal background were set out by the General Court in paragraphs 1 to 28 of the judgment of 14 February 2019, Belgium and Magnetrol International v Commission (T‑131/16 and T‑263/16, EU:T:2019:91), and by the Court of Justice in paragraphs 1 to 24 of the judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741; ‘the judgment on appeal’). For the purposes of the present proceedings, they may be summarised as follows. 3 By an advance ruling issued by the ‘service des décisions anticipées’ (Advance Ruling Commission) of the service public fédéral des finances belge (Belgian Federal Public Service for Finance) under Article 185(2)(b) of the Code des impôts sur les revenus 1992 (Income Tax Code 1992; ‘the CIR 92’), read in conjunction with Article 20 of the loi du 24 décembre 2002 modifiant le régime des sociétés en matière d’impôts sur les revenus et instituant un système de décision anticipée en matière fiscale (Law of 24 December 2002 amending the corporate income tax system and establishing an advance tax ruling system) (Moniteur belge, 31 December 2002, p. 58817; ‘the Law of 24 December 2002’), Belgian resident companies that were part of a multinational group and Belgian permanent establishments of foreign resident companies that were part of a multinational group could reduce their tax base in Belgium by deducting what was considered to be ‘excess’ profit from the profit which they had recorded. Under that system, part of the profit made by the Belgian entities benefiting from an advance ruling was not taxed in Belgium. According to the Belgian tax authorities, that excess profit arose from the synergies, economies of scale or other benefits resulting from membership of a multinational group and, accordingly, was not attributable to the Belgian entities in question. 4 It is apparent from the annex to the contested decision and the documents in the files in the present cases that, between 15 December 2005 and 20 November 2012, the Advance Ruling Commission, within the Belgian Ministry of Finance, adopted advance rulings on the exemption of excess profit in respect of the applicants. The applicants had requested those advance rulings following restructuring within their groups of undertakings aimed at making investments or centralising a number of functions and services with the companies in those groups that were established in Belgium. Those advance rulings were valid for five years or, in more exceptional cases, for four years. 5 Following an administrative procedure that was initiated on 19 December 2013 with a letter by which the European Commission requested the Kingdom of Belgium to provide information on the system of excess profit tax rulings, which were based on Article 185(2)(b) of the CIR 92, the Commission adopted the contested decision on 11 January 2016. 6 By the contested decision, the Commission found that the excess profit exemption scheme that was based on Article 185(2)(b) of the CIR 92, pursuant to which the Kingdom of Belgium had issued advance rulings to Belgian entities of multinational groups of undertakings, granting those entities an exemption in respect of part of their profit, constituted a State aid scheme giving its beneficiaries a selective advantage, for the purposes of Article 107(1) TFEU, that was incompatible with the internal market. 7 Thus, the Commission argued, principally, that the scheme at issue granted beneficiaries of the advance rulings a selective advantage, since the excess profit exemption applied by the Belgian tax authorities was a departure from the ordinary Belgian corporate income tax system. In the alternative, the Commission found that the excess profit exemption could confer a selective advantage on beneficiaries of the advance rulings, in so far as that exemption was not in line with the arm’s length principle. 8 Having found that the scheme at issue had been put into effect in breach of Article 108(3) TFEU, the Commission ordered that the aid thus granted be recovered from its beneficiaries, a definitive list of which was to be drawn up by the Kingdom of Belgium following the decision. II. Forms of order sought 9 The applicants claim that the Court should: – annul the contested decision; – in the alternative, annul Articles 2 to 4 of the contested decision; – order the Commission to pay the costs. 10 The Commission contends that the Court should: – dismiss the actions; – order the applicants to pay the costs. III. Law 11 It is appropriate that the present cases should be joined for the purposes of the decision closing the proceedings, in accordance with Article 68(1) of the Rules of Procedure of the General Court, the parties having been heard. 12 In support of their actions and on the basis of virtually identical applications, the applicants raise four pleas in law, which it is appropriate to examine in turn. A. First plea in law, alleging an error of law and a manifest error of assessment, in that the Commission found that there was an aid scheme 13 In the context of the first plea, the applicants submit, in essence, that the Commission incorrectly classified the scheme at issue as an aid scheme, within the meaning of Article 1(d) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9). According to the applicants, the Commission incorrectly assessed the acts that formed the basis of the scheme at issue, which do not reflect the essential elements of that scheme. Furthermore, the Commission was wrong to find that the acts on which the alleged aid scheme was based did not require further implementing measures. 14 The Commission contends that the applicants’ arguments in the context of the present plea should be rejected. 15 In that regard, it should be borne in mind that, in the judgment on appeal, the Court of Justice stated that the contested decision had established the existence of an aid scheme, within the meaning of Article 1(d) of Regulation 2015/1589, resulting from a systematic approach by the Belgian tax authorities, and thus rejected as unfounded the pleas put forward by the Kingdom of Belgium and Magnetrol International, alleging that it was incorrectly concluded that there was an aid scheme in that case. 16 In those circumstances, the applicants’ first plea, alleging that the Commission erred in finding that there was an aid scheme, must be rejected, that plea being, in essence, similar to those of the Kingdom of Belgium and Magnetrol International, which were rejected by the Court of Justice in the judgment on appeal. B. Second plea in law, alleging infringement of Article 107 TFEU, failure to state reasons and a manifest error of assessment in so far as the Commission found that the scheme at issue constituted a State aid measure 17 The second plea relied on by the applicants consists of three parts, relating to the existence of an advantage, the question whether the alleged advantage is attributable to the Kingdom of Belgium and the selectivity of the scheme at issue. 18 The Commission contends that the applicants’ arguments in the context of the present plea should be rejected. 1. The first part, disputing the Commission’s conclusion as to the existence of an advantage, for the purposes of Article 107(1) TFEU 19 In this part, the applicants allege a failure to state reasons, an error of law and a manifest error of assessment in so far as the Commission found that there was an advantage for the purposes of Article 107(1) TFEU. They complain, in essence, that the Commission did not separately assess whether the scheme at issue entailed the grant of an economic advantage to the beneficiaries concerned. In addition, the applicants submit, in essence, that the Commission made a manifest error of assessment in finding that the scheme at issue conferred an economic advantage on the beneficiaries in so far as that scheme departed from the arm’s length principle. 20 At the outset, it must be borne in mind that the statement of reasons for a measure adopted by the Commission must enable the persons concerned to ascertain the reasons for the measure so that they can defend their rights and ascertain whether or not the measure is well founded and so that the EU judicature can exercise its power of review. It is not necessary for the statement of reasons to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgments of 15 June 2005, Corsica Ferries France v Commission, T‑349/03, EU:T:2005:221, paragraphs 62 and 63; of 16 October 2014, Eurallumina v Commission, T‑308/11, not published, EU:T:2014:894, paragraph 44; and of 6 May 2019, Scor v Commission, T‑135/17, not published, EU:T:2019:287, paragraph 80). 21 Moreover, it must be noted that, in the analysis of the conditions set out in Article 107(1) TFEU that must be satisfied in order for a measure to constitute State aid, including that relating to the existence of a selective advantage, the concept of ‘advantage’ and the concept of the ‘selectivity’ thereof are two separate criteria. So far as advantage is concerned, the Commission must show that the measure improves the financial situation of the recipient (see, to that effect, judgment of 2 July 1974, Italy v Commission, 173/73, EU:C:1974:71, paragraph 15). However, so far as selectivity is concerned, the Commission must show that the advantage does not benefit other undertakings that are in a factual and legal situation comparable to that of the recipient in the light of the objective of the reference system (see, to that effect, judgment of 8 September 2011, Paint Graphos and Others, C‑78/08 to C‑80/08, EU:C:2011:550, paragraph 49). 22 In that regard, it should be noted that, according to the case-law, the requirement as to selectivity under Article 107(1) TFEU must be clearly distinguished from the concomitant detection of an economic advantage, in that, where the Commission has identified an advantage, understood in a broad sense, as arising directly or indirectly from a particular measure, it is also required to establish that that advantage specifically benefits one or more undertakings (judgment of 4 June 2015, Commission v MOL, C‑15/14 P, EU:C:2015:362, paragraph 59). 23 It must however be stated that, according to the case-law of the Court of Justice, those two criteria may be examined together as a ‘third condition’ laid down by Article 107(1) TFEU, requiring there to be a ‘selective advantage’ (see, to that effect, judgment of 30 June 2016, Belgium v Commission, C‑270/15 P, EU:C:2016:489, paragraph 32). 24 In the contested decision, the Commission’s reasoning with regard to the advantage is set out in its analysis of the existence of a selective advantage, that is, in Section 6.3, entitled ‘Existence of a selective advantage’. In that section, the Commission did in fact examine the criterion of advantage. 25 As a preliminary point, in recital 125 of the contested decision, the Commission indicated that the excess profit exemption applied by the Belgian tax authorities was not provided for by the Belgian corporate income tax system. Furthermore, in recital 126 of the contested decision, the Commission highlighted the fact that that exemption resulted in taxation on the basis of a hypothetical profit, and not on the basis of the total profit actually recorded by the Belgian entity. In recital 127 of the contested decision, it stated that although the Belgian system contained certain special provisions applicable to groups, they were aimed at putting integrated multinational group entities and standalone entities on an equal footing. 26 In that context, in recital 133 of the contested decision, the Commission indicated that, under the Belgian corporate income tax system, corporate entities resident or operating through a permanent establishment in Belgium were taxed on their profit actually recorded, not on a hypothetical level of profit, which was why the excess profit exemption conferred an advantage on Belgian group entities benefiting from the scheme at issue. 27 In recital 135 of the contested decision, the Commission recalled the case-law according to which an economic advantage may be granted through a reduction in an undertaking’s tax burden and, in particular, through a reduction in the tax base or in the amount of tax due. Thus the Commission found that, in this instance, the scheme at issue allowed corporate beneficiaries of advance rulings to reduce their tax liability by deducting a so-called ‘excess’ profit from their profit that was actually recorded. That excess profit was determined by estimating the hypothetical average profit of comparable standalone undertakings, so that the difference between the profit actually recorded and that hypothetical average profit was then translated into an exemption percentage underpinning the calculation of the tax base agreed for the five years of the advance ruling’s application. In so far as that tax base, thus determined on the basis of the advance rulings granted under the scheme at issue, was lower than it would have been had those advance rulings not been issued, an advantage would have arisen. 28 Therefore, it is apparent from the recitals of the contested decision highlighted in paragraphs 25 to 27 above that the advantage identified by the Commission consisted in the non-taxation of the excess profit of corporate beneficiaries, and in the taxation of their profit calculated solely on the basis of a hypothetical average profit that disregarded the total profit made by those companies and the adjustments provided for by law, in accordance with advance rulings under the scheme at issue. According to the Commission, such taxation represented a lowering of the tax burden of the beneficiaries of the scheme, in comparison with the burden that would have arisen from normal taxation, under the Belgian corporate income tax system, which would have covered all profits actually recorded, after applying the adjustments provided for by law. 29 Next, the actual analysis of the selectivity of that advantage is set out in recitals 136 to 141 of the contested decision, under Section 6.3.2.1, so far as concerns the Commission’s primary line of reasoning as to selectivity, based on the existence of a derogation from the general Belgian corporate income tax system. Moreover, the selectivity of the advantage represented by the excess profit exemption is also analysed in recitals 152 to 170 of the contested decision, under Section 6.3.2.2, as regards the Commission’s subsidiary line of reasoning as to selectivity, based on the existence of a derogation from the arm’s length principle. 30 It follows from the above that the justifications put forward by the Commission to support its findings as to the existence of an advantage and its selective nature do meet the requirements of the obligation to state reasons as set out in paragraph 20 above. 31 Moreover, the fact that, in terms of form, the analysis of advantage was included in a section that also covers the examination of selectivity does not reveal a failure to carry out a substantive examination of both concepts, in so far as the existence of an advantage, on the one hand, and the existence of its selective nature, on the other, are in fact assessed (see, to that effect, judgment of 24 September 2019, Netherlands and Others v Commission, T‑760/15 and T‑636/16, EU:T:2019:669, paragraph 129). Accordingly, the applicants’ complaints alleging an error of law and a manifest error of assessment as a result of that joint analysis must be rejected. 32 As regards the applicants’ arguments challenging the Commission’s assessment of the existence of an advantage, arising from a departure from the arm’s length principle adopted by the Commission, it should be noted that it is only in the context of the analysis of the selectivity of the scheme at issue that the Commission examined, in the alternative, the extent to which that scheme derogated from the arm’s length principle. Those arguments are, therefore, entirely irrelevant in the context of the examination of the Commission’s assessment of the existence of an advantage. 33 Lastly, as regards the arguments of Eval Europe and Ineos Aromatics alleging, in essence, that the contested decision does not apply to their individual situation, it must be borne in mind that the lawfulness of a decision relating to a State aid scheme cannot be called into question on the basis of what its beneficiaries claim to be their individual situation. As the Court of Justice noted in the judgment on appeal, in the case of an aid scheme, the Commission may confine itself to examining the characteristics of that scheme in order to assess whether it gives a selective advantage to its beneficiaries in relation to their competitors and is likely to affect trade between Member States. Thus, in a decision which concerns such a scheme, the Commission is not required to carry out an analysis of the aid granted in individual cases under the scheme (the judgment on appeal, paragraph 77). Accordingly, the Commission cannot be criticised for failing to take account of the individual situations of Eval Europe and Ineos Aromatics. 34 In those circumstances, this part of the present plea, concerning a failure to state reasons, an error of law and a manifest error of assessment as regards the Commission’s conclusion as to the existence of an advantage in this case, for the purposes of Article 107(1) TFEU, must be rejected. 2. The second part, concerning the question whether the alleged advantage is attributable to the Kingdom of Belgium 35 The applicants submit, in essence, that, even if the scheme at issue conferred an advantage on its alleged beneficiaries, the Commission erred in law and made a manifest error of assessment in concluding that that advantage was attributable to the Kingdom of Belgium. First, the grant of an advantage by a Member State cannot depend on the actions of other States. Secondly, excess profit does not fall within the Belgian tax jurisdiction, since that profit is not attributable to the Belgian taxpayer. 36 In that regard, it must be recalled that it is settled case-law that the definition of ‘aid’ is more general than that of a ‘subsidy’, given that it includes not only positive benefits, such as subsidies themselves, but also State measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which thus, without being subsidies in the strict sense of the term, are similar in character and have the same effect as them. Accordingly, a measure by which the public authorities grant certain undertakings favourable tax treatment which, although not involving the transfer of State resources, places the recipients in a more favourable financial position than other taxpayers amounts to State aid within the meaning of Article 107(1) TFEU (see judgment of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 71 and 72 and the case-law cited). 37 In this case, in recital 114 of the contested decision, the Commission claimed that the scheme at issue involved the exemption of excess profit, which constituted a reduction of tax for the undertakings benefiting from that scheme and, therefore, a loss of tax revenue that would otherwise have been available to the Kingdom of Belgium. Therefore, contrary to what the applicants claim, the Commission’s conclusion as to the existence of an advantage did not depend on the actions of third parties, but solely on the excess profit exemption granted by the Belgian tax authorities under the scheme at issue. 38 In addition, under Article 185(1) of the CIR 92, the total amount of the recorded profit of resident companies is taxable in Belgium. Accordingly, that profit must be regarded as falling within the tax jurisdiction of the Kingdom of Belgium even if it may be adjusted, specifically under the Belgian tax rules applicable, such as Article 185(2)(b) of the CIR 92. 39 Furthermore, in so far as the present cases concern tax charge reductions that were granted by the Advance Ruling Commission in response to a request made by the beneficiary concerned, it cannot be maintained that the exempted profit was, fundamentally, profit that was not taxable in Belgium. In fact, in the absence of a request in that regard, that profit would have been taxed in Belgium. Accordingly, the applicants cannot claim that the advantage conferred as a result of the excess profit exemption, granted by the Belgian tax authorities under the scheme at issue, cannot be attributable to the Belgian State. 40 In those circumstances, this part of the present plea, concerning the question whether the advantage granted by the scheme at issue is attributable to the Kingdom of Belgium, must be rejected. 3. The third part, concerning the selectivity of the scheme at issue 41 In this part, in essence, the applicants submit that the Commission erred in law and made a manifest error of assessment in claiming that the scheme at issue was selective. This part is divided into three sub-parts, the first relating to the incorrect identification of the reference system, the second, to the finding as to the existence of a derogation from that system, and the third, to the failure to take into consideration the justification put forward for such a derogation, assuming that it did exist. (a) Identification of the reference system 42 The applicants submit, in the light of recent case-law of the Court of Justice, that the Commission does not have the power itself to define what is termed ‘normal’ taxation in a Member State for the purposes of determining the reference system and that, by contrast, it is the legislative expression of the legislature’s intention in each State that determines the boundaries of the reference system. 43 More specifically, the applicants argue that the Commission made a manifest error of assessment in so far as it found that the excess profit exemption was not an integral part of the reference system, even though it recognised that Article 185(2)(b) of the CIR 92 constituted the legal basis of that scheme. Moreover, contrary to what the Commission maintains, companies are subject to taxation in Belgium on their taxable profit and not on their accounting profit, in so far as adjustments are provided for, in particular in order to prevent double taxation. Furthermore, the Commission ignored the fact that the scheme at issue was aimed at putting multinational groups and standalone entities on an equal footing. (1) Preliminary observations 44 As a preliminary point, it must be recalled that the determination of the reference system is of particular importance in the case of tax measures, since the existence of an economic advantage for the purposes of Article 107(1) TFEU may be established only when compared with ‘normal’ taxation. Thus, determination of the set of undertakings which are in a comparable factual and legal situation depends on the prior definition of the legal regime in the light of whose objective it is necessary, where applicable, to examine whether the factual and legal situation of the undertakings favoured by the measure in question is comparable with that of those which are not (see judgment of 8 November 2022, Fiat Chrysler Finance Europe v Commission, C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraph 69 and the case-law cited). 45 In that context, it has been held that the determination of the reference system, which must be carried out following an exchange of arguments with the Member State concerned, must follow from an objective examination of the content, the structure and the specific effects of the applicable rules under the national law of that State (see judgment of 6 October 2021, World Duty Free Group and Spain v Commission, C‑51/19 P and C‑64/19 P, EU:C:2021:793, paragraph 62 and the case-law cited). 46 In addition, it is apparent from settled case-law that, while the Member States must thus refrain from adopting any tax measure liable to constitute State aid that is incompatible with the internal market, the fact remains that outside the spheres in which EU tax law has been harmonised, it is the Member State concerned which determines, by exercising its own competence in the matter of direct taxation and with due regard for its fiscal autonomy, the characteristics constituting the tax, which define, in principle, the reference system or the ‘normal’ tax regime, from which it is necessary to analyse the condition relating to selectivity. This includes, in particular, the determination of the basis of assessment and the taxable event (see judgment of 8 November 2022, Fiat Chrysler Finance Europe v Commission, C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraphs 65 and 73 and the case-law cited). 47 It follows that only the national law applicable in the Member State concerned must be taken into account in order to identify the reference system for direct taxation, that identification being itself an essential prerequisite for assessing not only the existence of an advantage, but also whether it is selective in nature. 48 Furthermore, in order to determine whether a tax measure has conferred a selective advantage on an undertaking, it is for the Commission to carry out a comparison with the tax system normally applicable in the Member State concerned, following an objective examination of the content, the structure and the specific effects of the applicable rules under the national law of that State. Parameters and rules external to the national tax system at issue cannot therefore be taken into account in the examination of the existence of a selective tax advantage within the meaning of Article 107(1) TFEU and for the purposes of establishing the tax burden that should normally be borne by an undertaking, unless that national tax system makes explicit reference to them (see, to that effect, judgment of 8 November 2022, Fiat Chrysler Finance Europe v Commission, C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraphs 92 and 96). 49 In the light of the foregoing considerations, it is necessary to examine the applicants’ arguments, as set out in paragraph 42 above, disputing the Commission’s identification of the reference system. (2) The account taken of national law for the purposes of determining normal taxation applicable in Belgium 50 In the present cases, the Commission set out in recitals 121 to 129 of the contested decision its position concerning the reference system. 51 Thus, in recitals 121 and 122 of the contested decision, the Commission stated that the reference system was the ordinary system of taxation of corporate profits under the general Belgian corporate income tax system, which had as its objective the taxation of profit of all companies subject to tax in Belgium. Referring to Article 185(1) of the CIR 92, the Commission noted that the Belgian corporate income tax system applied to companies resident in Belgium and Belgian branches of non-resident companies. Under that provision, companies resident in Belgium were liable to corporate income tax on the total amount of their profit, unless a double taxation treaty applied. Moreover, under Articles 227 and 229 of the CIR 92, non-resident companies were only taxable on specific Belgium-sourced income. The Commission also stated that, in both cases, Belgian corporate income tax was payable on the total taxable profit under the Belgian corporate income tax system pursuant to Article 24 of the CIR 92. Under Article 185(1) of the CIR 92, read in conjunction with Articles 1, 24, 183, 227 and 229 of the CIR 92, the total taxable profit corresponded to companies’ income, less deductible expenses, which were generally recorded in the accounts. A series of upward and downward adjustments, provided for by the Belgian corporate income tax system, in particular by Article 185(2)(b) of the CIR 92, were then applied to that profit. 52 In recitals 123 to 128 of the contested decision, the Commission explained that the excess profit exemption scheme applied by the Belgian tax authorities was not an inherent part of the reference system. 53 More specifically, in recital 125 of the contested decision, the Commission found that that exemption was not prescribed by any provision of the CIR 92. Article 185(2)(a) of the CIR 92 allowed the Belgian tax administration to make a unilateral primary adjustment of a company’s profits where transactions or arrangements with associated companies were concluded on terms that differed from arm’s length conditions. By contrast, Article 185(2)(b) of the CIR 92 provided for the possibility of making downward adjustments of a company’s profit from an intra-group transaction or arrangement, subject to the additional condition that the profit to be adjusted had to have been included in the profit of the foreign counterparty to that transaction or arrangement. 54 In addition, in recital 126 of the contested decision, the Commission recalled that the objective of the Belgian corporate income tax system was to tax corporate taxpayers on their actual profits, irrespective of their legal form or size and of whether or not they formed part of a multinational group of undertakings. 55 Furthermore, in recital 127 of the contested decision, the Commission noted that, for the purposes of determining taxable profit, integrated multinational group companies were required to set the prices they applied to their intra-group transactions instead of those prices being dictated by the market, which is why Belgian tax law contained certain special provisions applicable to groups, which were generally aimed at putting non-integrated companies and economic entities structured in the form of groups on an equal footing. 56 In recital 129 of the contested decision, the Commission concluded that the reference system to be taken into consideration was the Belgian corporate income tax system, which had as its objective the taxation of profits of all companies resident or operating through a permanent establishment in Belgium in the same manner. That system included the applicable adjustments under the Belgian corporate income tax system, which determined the company’s taxable profit for the purpose of levying Belgian corporate income tax. 57 At the outset, it should be noted that the applicants do not dispute, as such, the general conclusion in recital 129 of the contested decision that the reference system is the Belgian corporate income tax system, which has as its objective the taxation of profits of all companies resident or operating through a permanent establishment in Belgium in the same manner. 58 By contrast, contrary to the applicants’ arguments, it is apparent from the foregoing that, in the context of the identification of the reference system, for the purposes of establishing what the ordinary or ‘normal’ tax system applicable in Belgium is, the Commission relied on the applicable legal provisions, in particular the CIR 92. Indeed, on the basis of the information provided by the Kingdom of Belgium in the context of the administrative procedure, the Commission described the legislative framework applicable and set out, in particular in recitals 23 to 28 of the contested decision, the Belgian corporate income tax system, as laid down by the CIR 92. Specifically, as stated in paragraph 51 above, the Commission expressly referred to Articles 1, 24, 183 and 185 of the CIR 92. For the purposes of identifying the reference system, the Commission relied on those provisions through cross-references in those recitals. 59 Moreover, the Commission specifically took into account the legislature’s intention when it analysed the scope of Article 185(2) of the CIR 92. The Commission based its analysis on the wording of that provision and on the texts accompanying its entry into force. Thus, in recitals 29 to 38 of the contested decision, the Commission described in detail, first, the text of Article 185(2) of the CIR 92, introduced by the loi du 21 juin 2004, modifiant le [CIR 92] et la loi du 24 décembre 2002 (Law of 21 June 2004 modifying the CIR 92 and the Law of 24 December 2002) (Moniteur belge, 9 July 2004, p. 54623); secondly, the explanatory memorandum to the draft of that law, presented to Belgium’s Chamber of Representatives by the Belgian Government on 30 April 2004 (‘the Memorandum to the Law of 21 June 2004’); and, thirdly, the circular of 4 July 2006 concerning Article 185(2) of the CIR 92 (‘the Circular of 4 July 2006’). 60 The situation is different as regards the replies given by the Belgian Minister for Finance on 13 April 2005, 11 April 2007 and 6 January 2015 to parliamentary questions on the application of Article 185(2)(b) of the CIR 92, described in recitals 39 to 42 of the contested decision, which constitute guidelines on the application by the Belgian tax authorities of the excess profit exemption system, as the applicants themselves acknowledge. Contrary to what the applicants claim, those replies cannot be presented as reflecting the intention of the Belgian legislature, but rather as setting out the Belgian tax authorities’ practice, which is precisely the State measure called into question by the Commission. 61 Consequently, contrary to the applicants’ contention, the Commission did not itself define the ordinary or ‘normal’ tax system applicable in Belgium; rather, it confined itself to the applicable legal provisions as communicated by the Kingdom of Belgium in the context of the administrative procedure. (3) The non-inclusion of the excess profit scheme in the reference system 62 It should be borne in mind that the Commission did not exclude Article 185(2)(b) of the CIR 92 from the reference system. However, it did find that the excess profit scheme, applied by the Belgian tax authorities, did not form part of that system, which the applicants dispute. 63 Thus, in order to determine whether the Commission correctly concluded that the excess profit scheme was not provided for by Article 185(2)(b) of the CIR 92, it is necessary to examine, on the one hand, the scope of that provision and, on the other, the excess profit scheme as applied by the Belgian tax authorities. (i) The scope of Article 185(2) of the CIR 92 64 As stated in paragraph 59 above, the Commission based its analysis on the wording of that provision and on the texts accompanying its entry into force, namely the Memorandum to the Law of 21 June 2004 and the Circular of 4 July 2006. 65 First of all, in the version applicable here, Article 185(2) of the CIR 92, to which reference is made in recital 29 of the contested decision, is worded as follows: ‘Without prejudice to the second paragraph, for two companies that are part of a multinational group of associated companies and in respect of their reciprocal cross-border relationships: … (b) when profit is included in the profit of one company which is already included in the profit of another company and the profit so included is profit which should have been made by that other company if the conditions agreed between the two companies had been those which would have been agreed between independent companies, the profit of the first company is adjusted in an appropriate manner. The first paragraph applies by way of advance ruling without prejudice to the application of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436) of 23 July 1990 or of a Convention for the avoidance of double taxation.’ 66 Next, the Memorandum to the Law of 21 June 2004, referred to in recital 34 of the contested decision, states that Article 185(2)(b) of the CIR 92 provides for an appropriate correlative adjustment in order to avoid or undo a (potential) double taxation, and that a correlative adjustment should be made only if the tax administration or the Advance Ruling Commission considers both the principle and the amount of the primary adjustment to be justified. 67 Moreover, the Memorandum to the Law of 21 June 2004 makes clear that that provision does not apply if the profit made in the partner State is increased in such a way that it is greater than the profit that would have been obtained had the arm’s length principle been applied, since the Belgian tax authorities are not obliged to accept the consequences of an arbitrary or unilateral adjustment in the partner State. 68 Lastly, the Circular of 4 July 2006, referred to in recital 38 of the contested decision, reiterates that such a downward adjustment does not apply in cases where the primary upward adjustment in another tax jurisdiction is exaggerated. That circular, moreover, largely reproduces the text of the Memorandum to the Law of 21 June 2004, in that it recalls that the corresponding downward adjustment is informed by the arm’s length principle, that its objective is to avoid or undo a (potential) double taxation and that it must be made in an appropriate manner, that is, that the Belgian tax authorities can make that adjustment only if both the principle and the amount of that adjustment are justified. 69 Accordingly, it is apparent from the wording of Article 185(2)(b) of the CIR 92 that the downward adjustment is envisaged in the context of cross-border relationships between two associated companies and that it must be a correlative adjustment, in the sense that it is applicable only if the profit that is to be adjusted is already included in the profit of the other company and the profit so included is profit which should have been made by that other company if the conditions agreed between the two companies had been those which would have been agreed between independent companies. 70 That finding is confirmed both by the Memorandum to the Law of 21 June 2004 and by the Circular of 4 July 2006, which make clear that both the principle and the amount of the correlative adjustment must be appropriate and that that adjustment should not be made if the profit made in another State is increased in such a way that it is greater than the profit that would have been obtained had the arm’s length principle been applied. Those texts indicate that the downward adjustment provided for by Article 185(2)(b) of the CIR 92 requires a correlation between the profit adjusted downwards in Belgium and profit included in another group company established in another State. (ii) The excess profit scheme 71 The Commission describes the excess profit scheme, as applied by the Belgian tax authorities, in recitals 13 to 22 of the contested decision. In addition, in recitals 39 to 42 of the contested decision, the Commission took into account the replies given by the Belgian Minister for Finance on 13 April 2005, 11 April 2007 and 6 January 2015 to parliamentary questions on the application of Article 185(2)(b) of the CIR 92. Those replies explain the administrative practice of the Belgian tax authorities relating to excess profit. 72 It is apparent from the replies referred to in paragraph 60 above that, in the context of the excess profit scheme applied by the Belgian tax authorities, the downward adjustment of profit enabling that excess profit to be deducted from the tax base was not conditional upon the exempted profit having been included in the profit of another company and that profit being profit which should have been made by that other company if the conditions agreed between them had been those which would have been agreed between independent companies. 73 It is, moreover, apparent from the explanations given by the Kingdom of Belgium, as set out in particular in recitals 15 to 20 of the contested decision, that the exemption applied by the Belgian tax authorities under the scheme at issue was based on an exemption percentage, calculated on the basis of a hypothetical average profit for the Belgian entity, obtained using a profit level indicator derived from a comparison with the profit of comparable standalone companies and fixed as a point in the interquartile range of the chosen profit level indicator of a comparable set of companies. That exemption percentage would have been applicable for a number of years, that is to say, during the period of validity of the advance ruling. Thus, the resulting starting point for the taxation of Belgian entities was not the full profit actually recorded, within the meaning of Articles 1, 24, 183 and Article 185(1) of the CIR 92, to which the adjustments provided for by law in the case of groups of undertakings would have been applied under Article 185(2) of the CIR 92; rather, it was a hypothetical average profit that disregarded the total profit made by the Belgian entity in question and the adjustments provided for by law. (iii) Conclusion on the non-inclusion of the excess profit scheme in the reference system 74 It follows from the above that, while Article 185(2)(b) of the CIR 92 requires, for the purposes of a downward adjustment, that the profit to be adjusted should already have been included in the profit of another company and be profit which should have been made by that other company if the conditions agreed between the two companies had been those which would have been agreed between independent companies, the excess profit scheme was applied by the Belgian tax authorities without those conditions being taken into consideration. 75 Accordingly, contrary to the applicants’ contention, the Commission was right to find that the excess profit exemption, as applied by the Belgian tax authorities under the scheme at issue, did not form part of the reference system. (4) The possibility of making adjustments to the profit recorded by taxable companies 76 As regards the applicants’ arguments that the Commission failed to take into consideration the possibility of making adjustments to the profits recorded by the taxable companies, it must be noted that it is apparent from the information provided by the Commission in recital 123 of the contested decision that it took into consideration the fact that the basis for calculating taxable profit was the total profit recorded by the entity in question, which was subject to the downward and upward adjustments provided for by the Belgian corporate income tax system. 77 More specifically, in recital 125 of the contested decision, the Commission noted that the upward and downward adjustments laid down in Article 185(2)(a) and (b) of the CIR 92 were special tax provisions applicable to situations in which the conditions agreed for a transaction or an arrangement differed from those that would have been agreed between independent companies. 78 Therefore, contrary to what is claimed by the applicants, the Commission did take into account the fact that, in the tax system applicable in Belgium, specifically as regards the taxable base for the taxation of corporate profit, it was possible to make upward and downward adjustments to the profits recorded. For the same reasons, the applicants’ claims that the Commission disregarded the fact that there was a difference in the Belgian tax system between the accounting profit and the taxable profit cannot be upheld. (5) The account taken of the fact that the scheme at issue was aimed at putting multinational groups and standalone entities on an equal footing 79 As noted in paragraphs 53 to 55 above, it should be recalled that, in recital 125 of the contested decision, the Commission indicated that the excess profit exemption applied by the Belgian tax authorities was not provided for by the Belgian corporate income tax system. Furthermore, in recital 126 of the contested decision, the Commission highlighted the fact that that exemption was calculated in disregard of the total profit actually recorded by the Belgian entity and the adjustments provided for by law. In recital 127 of the contested decision, it stated that although the Belgian system contained certain special provisions applicable to groups, these were aimed at putting integrated multinational group entities and standalone entities on an equal footing. 80 In that context, in recital 133 of the contested decision, the Commission indicated that, under the Belgian corporate income tax system, corporate entities resident or operating through a permanent establishment in Belgium were taxed on their profit actually recorded, not on a hypothetical level of profit, which was why the excess profit exemption conferred an advantage on Belgian group entities benefiting from the scheme at issue. 81 In recital 135 of the contested decision, the Commission recalled the case-law according to which an economic advantage may be granted through a reduction in an undertaking’s tax burden and, in particular, through a reduction in the tax base or in the amount of tax due. Thus it found that, in this instance, the scheme at issue allowed corporate beneficiaries of advance rulings to reduce their tax liability by deducting a so-called ‘excess’ profit from their profit that was actually recorded. That excess profit was determined by estimating the hypothetical average profit of comparable standalone undertakings, so that the difference between the profit actually recorded and that hypothetical average profit was then translated into an exemption percentage underpinning the calculation of the tax base agreed for the five years of the advance ruling’s application. 82 Therefore, contrary to the applicants’ arguments, it must be noted that, in the contested decision, the Commission took into account the fact that, within the ordinary system of taxation of corporate profits in Belgium, there were rules aimed at putting integrated multinational group entities and standalone entities on an equal footing. 83 In those circumstances, the Court must reject all of the applicants’ arguments challenging the Commission’s identification of the reference system in the contested decision. (b) The existence of a derogation from the reference system leading to the beneficiaries being treated differently in comparison with economic operators in a comparable situation 84 The applicants submit that the Commission erred in law and made a manifest error of assessment in finding that the scheme at issue constituted a selective derogation from the reference system that led to the beneficiaries being treated differently in comparison with economic operators in a comparable situation. 85 Thus, contrary to the Commission’s primary line of reasoning as to the existence of a selective advantage, the applicants claim, in essence, that the Commission erred in deciding that the companies taxed in Belgium would be taxed on their actual recorded profit. In addition, they maintain, in essence, that the Commission erred in finding that the scheme at issue conferred a selective advantage on Belgian entities, in so far as that scheme was not available to all entities in a similar legal and factual situation. Lastly, the applicants submit, in essence, that the scheme at issue cannot be regarded as selective, since it is not possible to identify a specific category of undertakings that could be distinguished on account of their specific characteristics. (1) The taxation of companies on their profit actually recorded 86 It must be noted that, in recital 122 of the contested decision, the Commission stated that the total profit was established according to the rules for profit determination laid down in the provisions on calculating taxable profit as defined in Article 24 of the CIR 92. 87 Article 24 of the CIR 92 provides that the taxable income of industrial, commercial and agricultural undertakings includes all income from entrepreneurial activities such as profit from ‘all the operations handled by those undertakings or through their intermediation’ as well as profit from ‘all increases in value of their assets … or decrease in value of their liabilities … when that profit has been realised and registered in the accounts’. 88 Moreover, recital 122 of the contested decision refers to Article 183 and Article 185(1) of the CIR 92. Under Article 183 of the CIR 92, income subject to corporate tax is the same as that envisaged by personal income tax, the calculation of which is based on the principle that the taxable income is made up of all net income, including profit, less deductible expenses. Furthermore, under Article 185(1) of the CIR 92, companies are taxable on the total amount of profit. 89 It follows that the taxable profit, for the purposes of the CIR 92, consists, fundamentally, of all profits recorded by undertakings subject to taxation in Belgium, since those profits constitute the starting point for calculating that tax in Belgium, and the deductions laid down by law are applicable to them. 90 Furthermore, as has been stated in paragraphs 76 to 78 above, contrary to what the applicants claim, the Commission did not disregard the fact that, in the case of profits on transactions between associated companies, adjustments had to be made in order to determine the taxable profit of the company subject to taxation in Belgium. 91 Thus, contrary to the applicants’ contention, the position taken by the Commission in the contested decision does not mean that all profit recorded by companies that are subject to taxation in Belgium must be taxed by the Belgian tax authorities without any adjustments being made to the profits recorded in the accounts of those companies. In fact, the Commission itself takes account of the fact that the total recorded profit provides the basis for calculation that is subject to the adjustments provided for by the ordinary Belgian corporate income tax system. 92 Moreover, what the Commission criticises the Belgian tax authorities for is their practice of taxing only a hypothetical profit, disregarding the total profit made by the Belgian entity in question and the adjustments provided for by law. 93 In those circumstances, the applicants’ arguments challenging the Commission’s finding, in the context of its primary line of reasoning, that the excess profit exemption scheme derogated from the ordinary Belgian corporate income tax system must be rejected. (2) Whether beneficiaries are treated differently in comparison with economic operators in a comparable situation 94 As regards the question whether the scheme at issue led to its beneficiaries being treated differently in comparison with other operators who are in a comparable situation, it should be noted that, in recitals 138 to 140 of the contested decision, the Commission put forward three alternative grounds for its conclusion. It is appropriate to examine each of these in turn, for the sake of completeness. (i) Different treatment of beneficiaries forming part of a multinational group of undertakings 95 In recital 138 of the contested decision, the Commission asserted that the scheme was selective because it was only open to entities that were part of a multinational group of undertakings. 96 In the present cases, it is common ground that the scheme at issue, which makes it possible to claim that profit regarded as excess profit should not be taxed, is open only to entities that are part of a multinational group of undertakings. 97 It is true that Article 185(2)(b) of the CIR 92 is intended to apply to integrated multinational group companies. However, as is apparent from the texts accompanying the entry into force of Article 185(2) of the CIR 92, submitted by the Kingdom of Belgium, the purpose of that provision is precisely to put associated and unrelated undertakings on an equal footing. 98 In that regard, as stated in paragraphs 56 and 57 above, it must be recalled that the objective of the ordinary Belgian corporate income tax system, as is apparent from recital 129 of the contested decision, is the taxation of all the taxable profits of entities subject to Belgian corporate income tax, whether they are standalone entities or form part of a multinational group of undertakings. In addition, as stated in paragraph 89 above, according to the normal rules of taxation in Belgium, the starting point for the taxable profit of undertakings is all the profit realised or registered in their accounts. 99 By contrast, the excess profit exemption applied by the Belgian tax authorities, in so far as it derogates from Article 185(2) of the CIR 92, granted a tax reduction to the beneficiaries concerned, on the ground that they were part of a multinational group of undertakings, by allowing them to deduct part of their recorded profit from their tax base, without that exempted profit having been included in the profit of another group company. 100 Therefore, entities forming part of a multinational group which benefited under the scheme at issue from an excess profit exemption, in the form of an exemption percentage calculated on the basis of a hypothetical average profit that disregarded the total profit made by those companies and the adjustments provided for by law, would be treated differently from other entities, whether standalone or forming part of a group of undertakings, which would have been taxed in accordance with the normal Belgian rules of corporate income tax on their total profit actually recorded, where appropriate, in the case of integrated entities, after adjustment pursuant to Article 185(2)(b) of the CIR 92 under the conditions laid down in that provision. 101 Accordingly, the Commission cannot be criticised for having stated that the entities forming part of a multinational group which benefited from the excess profit exemption pursuant to the scheme at issue, as an adjustment which is not as such provided for by law, were treated differently from other entities in Belgium that did not benefit from it, although those entities were in a comparable factual and legal situation, in the light of the objective of the ordinary Belgian corporate income tax system, which is the taxation of all taxable profits of all companies resident or operating through a permanent establishment in Belgium. (ii) Different treatment in comparison with undertakings that have not made investments, created employment or centralised activities in Belgium 102 In recital 139 of the contested decision, the Commission stated that the scheme at issue was selective in so far as it was not open to companies that may have decided not to make investments, create employment or centralise activities in Belgium. The Commission noted that Article 20 of the Law of 24 December 2002 made the adoption of advance rulings conditional on the existence of a situation or of a transaction that had not had tax consequences and that an advance ruling was necessary in order to benefit from the excess profit exemption. 103 The Commission also noted that, in the sample of advance rulings granting an excess profit exemption that it had analysed, each ruling contained references to substantial investments, centralisation of activities or the creation of employment in Belgium. Accordingly, it found that the ‘new situation’ requirement that was a prerequisite for requests for advance rulings by which requesting parties sought to benefit from the excess profit exemption resulted in multinational groups that amended their business model by establishing new operations in Belgium being treated differently from any other economic operators, including multinational groups, that continued to operate under their existing business models in Belgium. 104 In that regard, it should be recalled that, in paragraphs 142 to 144 of the judgment on appeal, the Court of Justice confirmed that the choice of a sample consisting of 22 advance rulings, issued in 2005, 2007, 2010 and 2013, was appropriate and sufficiently representative. 105 It should also be noted that Article 20 of the Law of 24 December 2002 defines an ‘advance ruling’ as the legal act by which the Federal Public Service for Finance determines, in accordance with the applicable provisions, how the law will apply to a particular situation or transaction that has not yet had tax consequences. Moreover, Article 22 of that law makes clear that an advance ruling cannot be issued, in particular, when the request concerns situations or transactions identical to those having already had tax consequences as regards the requesting party. 106 Admittedly, it cannot be inferred from the provisions referred to in paragraph 105 above that the making of investments, creation of employment or centralisation of activities in Belgium is explicitly required as a condition for obtaining an advance ruling. 107 However, it is apparent from the sample of advance rulings analysed by the Commission in the contested decision that those rulings were in fact granted following requesting parties’ proposals to invest, to relocate certain operations or to create a certain number of jobs in Belgium. Indeed, the three examples in footnote 80 to the contested decision, in which the parties requesting the advance rulings in question described their plans for investment and for recentralisation of activities in Belgium, show that, in practice, the condition for the issue of an advance ruling, that there should be a situation that had not had tax consequences, was satisfied by investments, by the centralisation of activities or by the creation of employment in Belgium. 108 In that regard, it should be borne in mind that, in this instance, it is precisely the administrative practice of the Belgian tax authorities – consisting in exempting profits by advance rulings – that has been considered to derogate from what is provided for in Article 185(2)(b) of the CIR 92. As a result of those advance rulings, their beneficiaries obtained an advantage consisting in a reduction in their tax base, because of the exemption of ‘excess’ profit. By contrast, entities that did not amend their business model in order to create new tax situations – which, in the light of that practice, consisted systematically in investments, centralisation of activities or creation of employment in Belgium – and therefore did not request an advance ruling were taxed on all of their taxable profits. Consequently, the scheme at issue resulted in companies that were in a comparable factual and legal situation being treated differently, in the light of the objective of the ordinary Belgian corporate income tax system. 109 In those circumstances, the Commission cannot be criticised for having stated, in recital 139 of the contested decision, that the system at issue was selective because it was not open to companies that had decided not to make investments, centralise activities or create employment in Belgium. (iii) Different treatment in comparison with undertakings that are part of a small group 110 In the present cases, the Commission stated, in recital 140 of the contested decision, that the scheme at issue was selective since only Belgian entities forming part of a large or medium-sized multinational group could effectively benefit from the excess profit exemption. 111 Indeed, in recital 140 of the contested decision, the Commission indicated that only entities belonging to a sufficiently large multinational group had an incentive to obtain an advance ruling, given that it was only within large corporate groups that synergies, economies of scale and other benefits were likely to generate a significant profit that would justify the request for an advance ruling. The Commission also noted that the process for obtaining such a ruling required a detailed request presenting the new situation that justified the exemption together with excess profit studies, which was more cumbersome for small corporate groups than for large corporate groups. 112 In that regard, it is not disputed that, within the sample of 22 advance rulings under the scheme at issue that was reviewed by the Commission, as described in recital 65 of the contested decision, and which was considered appropriate and representative in paragraphs 142 to 144 of the judgment on appeal, none of those rulings concerned entities belonging to small groups of undertakings. 113 Furthermore, as indicated in recital 66 of the contested decision, it is undisputed that, during the administrative procedure, following that finding by the Commission on the basis of the sample of 22 advance rulings and in response to a request by the Commission to that effect, the Kingdom of Belgium was unable to substantiate its claim that the exemption had also been granted to undertakings belonging to small corporate groups. 114 Consequently, in the light of the administrative practice referred to by the Commission, it is undertakings forming part of large and medium-sized groups that relied on the excess profit exemption scheme, to the exclusion of undertakings forming part of a small corporate group. 115 In those circumstances, the Commission cannot be criticised for having stated, in recital 140 of the contested decision, that the system at issue was selective because it was not open to undertakings that were part of a small group. 116 In any event, even if the Commission had erred in relying on that ground relating to different treatment in comparison with undertakings forming part of a small group, that would not affect the validity of the other two grounds put forward by the Commission, which have been examined, respectively, in paragraphs 95 to 101 and 102 to 109 above. (3) The complaint concerning the failure to identify a specific category of undertakings that could be distinguished on account of their specific characteristics 117 With regard to the applicants’ complaint that the Commission did not identify a specific category of undertakings likely to benefit from the scheme at issue, it must be borne in mind that it is apparent from the case-law of the Court of Justice that the Commission is not required to define a particular category of undertakings favoured by a tax measure in order to be able to find that it is selective (see, to that effect, judgment of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 93). Accordingly, this complaint must be rejected. (4) Conclusion on the Commission’s primary line of reasoning 118 In the light of the above, the Commission did not err in stating, after setting out its primary line of reasoning, that the excess profit exemption scheme derogated from the ordinary Belgian corporate income tax system. Moreover, the Commission did not err when it pointed out that the scheme in question was not available to all entities in a similar legal and factual situation in the light of the objective of the Belgian corporate income tax system, which was to tax the profits of all companies subject to tax in Belgium. 119 In those circumstances, it is not necessary to examine the merits of the applicants’ arguments against the subsidiary line of reasoning with regard to selectivity which the Commission set out in Section 6.3.2.2 of the contested decision. (c) Whether there is any justification based on the nature and general scheme of the tax system 120 The applicants submit, in essence, that even if the scheme at issue had selectively derogated from the reference system, quod non, it would be justified by the nature and general scheme of the Belgian tax system, in that it is aimed at preventing double taxation. 121 In that regard, it must be noted that, in recitals 173 to 181 of the contested decision, the Commission concluded, in essence, that the Kingdom of Belgium had not been able to establish that the measures at issue actually served the purpose of avoiding double taxation. According to the Commission, in so far as Article 185(2)(b) of the CIR 92 provided for a downward adjustment of a company’s profit if it had been included in the profit of another company, the exemption applied by the Belgian tax authorities, without it being necessary to prove that the excess profit to be exempted had been included in the tax base of another company, could not be justified by the general scheme of the system. Thus, the Commission concluded that the unilateral exemption at issue would not address situations of double taxation in a necessary and proportionate manner. 122 It should be borne in mind that, according to the case-law, a measure which constitutes an exception to the application of the general tax system may be justified if the Member State concerned can show that that measure results directly from the basic or guiding principles of its tax system. In that context, it is necessary to distinguish between, on the one hand, the objectives attributed to a particular tax regime and which are extrinsic to it and, on the other, the mechanisms inherent in the tax system itself which are necessary for the achievement of such objectives. Thus, tax exemptions which are the result of an objective that is unrelated to the tax system of which they form part cannot circumvent the requirements under Article 107(1) TFEU (see, to that effect, judgment of 8 September 2011, Paint Graphos and Others, C‑78/08 to C‑80/08, EU:C:2011:550, paragraphs 64, 65, 69 and 70). 123 In the present cases, it has been determined, in paragraphs 72 and 73 above, that the excess profit exemption applied by the Belgian tax authorities was not conditional on it being demonstrated that that profit had been included in the profit of another company. Nor was that excess profit required actually to have been taxed in another State. Accordingly, it must be held that the measures at issue were not conditional on there being a situation of possible or actual double taxation. Indeed, it is precisely where the profit of a Belgian entity is already included in the profit of another company, established in another State, that the possibility of double taxation can arise. 124 In those circumstances, it cannot be maintained that the excess profit exemption, as applied by the Belgian tax authorities, was intended to avoid either actual or possible double taxation. Therefore, the Commission was right to conclude that such an exemption did not address situations of double taxation in a necessary and proportionate manner. 125 In the light of the foregoing, the Court must reject the applicants’ arguments to the effect that the Commission incorrectly found that there was no justification based on the nature and general scheme of the Belgian tax system. (d) Conclusion on the plea alleging infringement of Article 107 TFEU, failure to state reasons and a manifest error of assessment, in that the Commission found that the scheme at issue constituted a State aid measure 126 It is apparent from the findings made in paragraphs 34, 40, 83, 118 and 125 above that, in the contested decision, the Commission did not err in finding that the scheme at issue granted an advantage to its beneficiaries, which was attributable to the Kingdom of Belgium, and that it was selective, in that that scheme constituted a derogation from the reference system leading to its beneficiaries being treated differently in comparison with economic operators in a comparable situation, which, moreover, was not justified by the nature of the tax system, in so far as it was not intended to avoid double taxation. 127 In those circumstances, the second plea in law relied on by the applicants in the present cases, alleging infringement of Article 107 TFEU, failure to state reasons and a manifest error of assessment, in that the Commission found that the scheme at issue constituted a State aid measure, must be rejected. C. Third plea in law, alleging infringement of Article 16(1) of Regulation 2015/1589 and breach of the general principles of legal certainty and the protection of legitimate expectations, as a result of the recovery of the aid ordered by the Commission 128 The applicants submit, in essence, that, on the basis of the Commission’s consistent decision-making practice, which did not call into question the application of the internationally accepted arm’s length principle, the Commission, by ordering that the alleged aid in the present cases be recovered, infringed Article 16(1) of Regulation 2015/1589 and breached the principles of legal certainty and the protection of legitimate expectations. 129 The Commission contends that the applicants’ arguments in the context of the present plea should be rejected. 130 Under Article 16 of Regulation 2015/1589, where the Commission finds that there is State aid that is incompatible with the internal market and unlawful, it is to decide that the Member State concerned is to take all necessary measures to recover the aid from the beneficiary, unless this would be contrary to a general principle of EU law. 131 In accordance with settled case-law, the logical consequence of a finding that aid is unlawful is the removal of that aid by means of recovery in order to re-establish the situation previously obtaining. The main objective pursued in recovering unlawfully paid State aid is to eliminate the distortion of competition caused by the competitive advantage which such aid affords. By repaying the aid, the recipient loses the advantage which it had enjoyed over its competitors on the market, and the situation prior to payment of the aid is restored (see judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 131 and the case-law cited). 132 As regards the claim alleging breach of the principle of the protection of legitimate expectations, according to settled case-law, that principle is among the fundamental principles of EU law and any economic operator whom an institution has, by giving him or her precise assurances, caused to entertain justified expectations may rely on that principle (see judgment of 24 October 2013, Kone and Others v Commission, C‑510/11 P, not published, EU:C:2013:696, paragraph 76 and the case-law cited). 133 Such assurances, in whatever form they are given, are precise, unconditional and consistent information from authorised and reliable sources. However, a person may not plead breach of that principle unless he or she has been given precise assurances by the administration (see judgment of 14 February 2006, TEA-CEGOS and Others v Commission, T‑376/05 and T‑383/05, EU:T:2006:47, paragraph 88 and the case-law cited). 134 In the present cases, the applicants merely assert that they could not have anticipated that the advance rulings would constitute State aid because of an alleged previous practice of the Commission concerning the arm’s length principle. They do not put forward any argument, supported by evidence, to establish that they received precise assurances from the Commission, within the meaning of the case-law cited in paragraph 132 above, that might have caused them to entertain justified expectations that the Commission would not regard exemptions granted by advance rulings that deviate from the general system of corporate taxation in Belgium, and in particular Article 185(2)(b) of the CIR 92, as unlawful and incompatible State aid. 135 In that regard, it must be borne in mind that, even if there were a previous practice on the part of the Commission that differed from the approach adopted in this instance, such a practice cannot bind the Commission, which is deemed to base its assessment solely on the applicable legal provisions of the FEU Treaty and secondary legislation. The lawfulness of a Commission decision finding that a measure constitutes aid must be assessed solely in the context of Article 107 TFEU, and not in the light of what is alleged to be previous practice. 136 In any event, since the Commission correctly found, as part of its primary line of reasoning, that the scheme at issue had granted its beneficiaries a selective advantage for the purposes of Article 107 TFEU (paragraph 118 above), the applicants’ arguments alleging breach of the principle of the protection of legitimate expectations by the Commission in its subsidiary line of reasoning are ineffective. 137 As regards the alleged breach of the principle of legal certainty, it is appropriate to recall the established case‑law that the principle of legal certainty requires that EU legislation must be certain and its application foreseeable by those subject to it (see judgment of 21 July 2011, Alcoa Trasformazioni v Commission, C‑194/09 P, EU:C:2011:497, paragraph 71 and the case-law cited). 138 Thus, for the same reasons as those set out in paragraphs 134 to 136 above, the classification of the excess profit exemption scheme, applied by the Belgian tax authorities, as incompatible and unlawful State aid, in that it was liable to mitigate the charges included in the budget of the beneficiaries of that scheme, cannot be regarded as unforeseeable for those beneficiaries in accordance with the case-law referred to in paragraph 137 above and therefore as contrary to the principle of legal certainty. 139 In those circumstances, the third plea in law relied on by the applicants in the present cases, alleging infringement of Article 16(1) of Regulation 2015/1589 and breach of the general principles of legal certainty and the protection of legitimate expectations as a result of the recovery of the aid ordered by the Commission, must be rejected. D. Fourth plea in law, alleging infringement of Article 2(6) TFEU and misuse of powers by reason of the Commission’s encroachment upon the tax jurisdiction of the Kingdom of Belgium 140 The applicants submit, in essence, that the Commission used EU law on State aid in order to pursue harmonisation of EU tax legislation by unilaterally determining matters coming within the tax jurisdiction of the Kingdom of Belgium. The objective of positive harmonisation by the European Union in the field of anti-tax-avoidance measures can only be legitimately implemented through legislation as provided for in Article 115 TFEU and not by the Commission using its powers under State aid rules. Accordingly, the Commission infringed the division of powers and the institutional balance enshrined in the Treaties. 141 The Commission contends that the applicants’ arguments in the context of the present plea should be rejected. 142 In that regard, it must be borne in mind that the Court of Justice has already rejected such an argument against the contested decision, finding, in particular, that the Commission could not be accused of having exceeded its powers when it examined the measures constituting the scheme at issue and when it ascertained whether those measures constituted State aid and, if so, whether they were compatible with the internal market (the judgment on appeal, paragraph 163). In exercising their competence in the field of taxation and in adopting measures necessary to avoid situations of double taxation, the Member States must refrain from adopting measures which may constitute State aid, the monitoring of which falls within the Commission’s competence (the judgment on appeal, paragraph 166). 143 It follows that the Commission did not exceed its powers and therefore did not misuse its powers when it decided to examine the compatibility with State aid rules of the advance rulings granted by the Belgian tax authorities under the scheme at issue. 144 In addition, in so far as the applicants largely repeat the arguments that they raised in the other pleas put forward in the present actions, by which they challenged the Commission’s assessments, set out in the contested decision, relating to the finding that the scheme at issue had granted a selective advantage to its beneficiaries, it should be recalled that those arguments have been rejected as unfounded or ineffective. 145 In those circumstances and in the light of the foregoing considerations, the fourth plea in law relied on by the applicants in the present cases, alleging infringement of Article 2(6) TFEU and misuse of powers by reason of the Commission’s encroachment upon the tax jurisdiction of the Kingdom of Belgium, must be rejected. 146 Since none of the pleas put forward by the applicants is well founded, the actions must be dismissed in their entirety. IV. Costs 147 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants in the present cases have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Commission, in accordance with the form of order sought by the Commission. On those grounds, THE GENERAL COURT (Second Chamber, Extended Composition) hereby: 1. Orders that Cases T‑266/16, T‑324/16, T‑351/16, T‑363/16, T‑371/16 and T‑388/16 be joined for the purposes of the present judgment; 2. Dismisses the actions; 3. Orders Capsugel Belgium to bear its own costs and to pay those incurred by the European Commission in Case T‑266/16; 4. Orders VF Europe BVBA to bear its own costs and to pay those incurred by the Commission in Case T‑324/16; 5. Orders Belgacom International Carrier Services to bear its own costs and to pay those incurred by the Commission in Case T‑351/16; 6. Orders Zoetis Belgium to bear its own costs and to pay those incurred by the Commission in Case T‑363/16; 7. Orders Ineos Aromatics Ltd to bear its own costs and to pay those incurred by the Commission in Case T‑371/16; 8. Orders Eval Europe NV to bear its own costs and to pay those incurred by the Commission in Case T‑388/16. Marcoulli Frimodt Nielsen Tomljenović Norkus Valasidis Delivered in open court in Luxembourg on 20 September 2023. V. Di Bucci M. van der Woude Registrar President Table of contents I. Background to the dispute II. Forms of order sought III. Law A. First plea in law, alleging an error of law and a manifest error of assessment, in that the Commission found that there was an aid scheme B. Second plea in law, alleging infringement of Article 107 TFEU, failure to state reasons and a manifest error of assessment in so far as the Commission found that the scheme at issue constituted a State aid measure 1. The first part, disputing the Commission’s conclusion as to the existence of an advantage, for the purposes of Article 107(1) TFEU 2. The second part, concerning the question whether the alleged advantage is attributable to the Kingdom of Belgium 3. The third part, concerning the selectivity of the scheme at issue (a) Identification of the reference system (1) Preliminary observations (2) The account taken of national law for the purposes of determining normal taxation applicable in Belgium (3) The non-inclusion of the excess profit scheme in the reference system (i) The scope of Article 185(2) of the CIR 92 (ii) The excess profit scheme (iii) Conclusion on the non-inclusion of the excess profit scheme in the reference system (4) The possibility of making adjustments to the profit recorded by taxable companies (5) The account taken of the fact that the scheme at issue was aimed at putting multinational groups and standalone entities on an equal footing (b) The existence of a derogation from the reference system leading to the beneficiaries being treated differently in comparison with economic operators in a comparable situation (1) The taxation of companies on their profit actually recorded (2) Whether beneficiaries are treated differently in comparison with economic operators in a comparable situation (i) Different treatment of beneficiaries forming part of a multinational group of undertakings (ii) Different treatment in comparison with undertakings that have not made investments, created employment or centralised activities in Belgium (iii) Different treatment in comparison with undertakings that are part of a small group (3) The complaint concerning the failure to identify a specific category of undertakings that could be distinguished on account of their specific characteristics (4) Conclusion on the Commission’s primary line of reasoning (c) Whether there is any justification based on the nature and general scheme of the tax system (d) Conclusion on the plea alleging infringement of Article 107 TFEU, failure to state reasons and a manifest error of assessment, in that the Commission found that the scheme at issue constituted a State aid measure C. Third plea in law, alleging infringement of Article 16(1) of Regulation 2015/1589 and breach of the general principles of legal certainty and the protection of legitimate expectations, as a result of the recovery of the aid ordered by the Commission D. Fourth plea in law, alleging infringement of Article 2(6) TFEU and misuse of powers by reason of the Commission’s encroachment upon the tax jurisdiction of the Kingdom of Belgium IV. Costs * Language of the case: English.