Judgment — ECLI:EU:C:2014:2262
Date: 2014-10-09
Language of the case: Spanish
Court formation: Seventh Chamber
Subject matter: State aids;Competition
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary — Judgment of the Court (Seventh Chamber), 9 October 2014 1. State aid — Concept — Grant by the public authorities of favourable tax treatment to certain undertakings — Included — Advantages resulting from a general measure applicable without distinction to all economic operators — Not included (Art. 107(1) TFEU) 2. State aid — Concept — Selective nature of the measure — Measure pursuing an objective of national defence — No effect (Art. 107(1) TFEU) 3. State aid — Concept — Selective nature of the measure — Derogation from the general tax system — Justification derived from the nature and general scheme of the system — Criteria for assessment — Exemption from property tax on immovable property, whether constructed or not — Assessment by the national court (Art. 107(1) TFEU) 4. State aid — Concept — Tax exemption granted by public authorities to certain undertakings — Included (Art. 107(1) TFEU) 5. State aid — Effect on trade between Member States — Adverse effect on competition — Tax exemption granted to an undertaking exercising an activity on a market open to competition — Civil and military shipbuilding sector — Assessment by the national court (Art. 107(1) TFEU) 1. See the text of the decision. (see paras 23, 33) 2. See the text of the decision. (see para. 28) 3. On a proper construction of Article 107(1) TFEU, the exemption from property tax of a plot of land belonging to the State and made available to an undertaking whose capital is wholly State-owned and which produces, from that plot of land, goods and services that may be traded between Member States on markets open to competition may constitute State aid prohibited by that provision. A State measure is of such a nature as to favour certain undertakings or the production of certain goods as compared with others which, in the light of the objective pursued by the regime in question, are in a comparable legal and factual situation. It follows that, in order to categorise a domestic tax measure as ‘selective’, it is necessary to begin by identifying and examining the common or ‘normal’ regime applicable in the Member State concerned. It is in relation to that common or ‘normal’ tax regime that it is necessary, secondly, to assess and determine whether any advantage granted by the tax measure at issue may be selective, by demonstrating that the measure derogates from that common regime inasmuch as it differentiates between economic operators who, in the light of the objective attributed to the tax system of the Member State concerned, are in a comparable factual and legal situation. As regards a property tax system which provides for an exemption for immovable property owned by the State and ‘used for the purposes of national defence’ and which is capable of applying to an undertaking whose activities consist of the construction of naval vessels for States and the manufacture, repair, and maintenance of various products for the private sector in the maritime and energy fields, such an undertaking, in the light of the objective of taxing the ownership or use of land, is in a factual and legal situation comparable not only to that of undertakings which own or use land for purposes partly related to national defence, but also to those undertakings which own or use land for exclusively civil purposes. Therefore, as compared with the latter group of undertakings, that undertaking would enjoy, as regards its civil business activities, a tax advantage that is not available to other companies whose factual and legal situation is comparable. However, the concept of State aid does not refer to State measures which differentiate between undertakings, where that differentiation arises from the nature or the overall structure of the system of charges of which they are part, which it is for the Member State concerned to demonstrate. A measure which creates an exception to the application of the general tax system may be justified by the nature and overall structure of the tax system if the Member State concerned can show that that measure results directly from the basic or guiding principles of its tax system. In that connection, a distinction must be made between, on the one hand, the objectives attributed to a particular tax regime, which are extrinsic to it, and, on the other hand, the mechanisms inherent in the tax system itself, which are necessary for the achievement of such objectives. Prima facie, an exemption for immovable property owned by the State and used for the purposes of national defence does not appear to be directly related to the objectives of that property tax. It is for the referring court, however, to determine whether, in the light of all the relevant evidence in the dispute before it, assessed by reference to the interpretative guidance provided by the Court, such an exemption falls to be categorised as State aid within the meaning of that provision. (see paras 34, 35, 40-44, 56, operative part) 4. See the text of the decision. (see paras 47-50) 5. If aid granted by a Member State strengthens the position of an undertaking as compared with that of other undertakings competing in intra-Community trade, the latter undertakings must be regarded as affected by that aid. In the shipbuilding sector, which is a market open to competition and to trade between Member States, an undertaking whose activities consist in the construction of naval vessels for States and the manufacture, repair, and maintenance of various products for the private sector in the maritime and energy fields is therefore in competition with other undertakings, not only as regards the civil business activities of that undertaking, but also as regards its business activities in the military sector. Therefore, the exemption from property tax of a plot of land belonging to the State and made available to that undertaking whose capital is wholly State-owned is capable of affecting trade between Member States and of distorting competition, it being for the referring court to determine whether that is indeed the case. (see paras 52-54)