OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 26 March 2026 (1)
Joined Cases C‑757/23 P and C‑758/23 P
Magnetrol International,
Puratos,
Delta Light,
Ontex,
Siemens Industry Software,
BASF Antwerpen NV,
Ansell Healthcare Europe NV,
Trane, Inc.,
Kinepolis Group,
Vasco Group,
Mayekawa Europe NV/SA
v
European Commission (C‑757/23 P)
and
Celio International SA
v
European Commission (C‑758/23 P)
( Appeals – State aid – Aid scheme implemented by the Kingdom of Belgium – Tax ruling – Excess profit exemption – Criterion of State-aid control in tax law – Unlawful administrative practice as aid – Recovery of aid from group companies – Concept of beneficiary of aid )
I.      Introduction
1.        When assessing the practice of the tax authorities of a Member State under State-aid law, are the European Commission and the EU Courts bound by the Member State’s interpretation of a provision of national tax law where that interpretation is not consistent with the wording of the provision?
2.        That question lies at the heart of the appeals brought by Magnetrol International, Puratos, Delta Light, Ontex, Siemens Industry Software, BASF Antwerpen NV, Ansell Healthcare Europe NV, Trane, Inc., Kinepolis Group, Vasco Group, Mayekawa Europe NV/SA and Celio International SA
(‘the appellants’) against the judgment of the General Court of 20 September 2023 (2) (‘the judgment under appeal’). The present appeals are part of a series of appeals on which I am likewise delivering Opinions today. (3)
3.        The judgment under appeal concerns the decision of the Commission
of 11 January
2016 (4) (‘the decision at issue’), in which the Commission considered that the ‘excess profit exemption’ (‘the tax practice at issue’) implemented by the Belgian tax authorities from 2004 to 2014 constituted aid incompatible with the internal market. The tax practice at issue (sometimes also referred to as an excess profit tax ruling system) made it possible to reduce the taxable profit of companies in Belgium forming part of an international group through advance tax rulings (‘tax rulings’).
4.        The Belgian tax authorities based that practice on a provision of Belgian tax law, namely Article 185(2)(b) of the Code des impôts sur les revenus 1992 (Income Tax Code 1992; ‘CIR 92’). According to its wording, it allows corporate profits to be adjusted in cases where they have been influenced by arrangements which do not comply with the arm’s length principle. The provision probably comes into play most frequently in cases of non-arm’s length transfer pricing. (5) Both the Commission, in the decision at issue, and the General Court, in the judgment under appeal, concluded that that tax practice constituted a derogation from the entire body of Belgian law on corporate income tax
(as the reference framework).
5.        The present appeals give the Court of Justice the opportunity to decide to what extent the Commission and the General Court are bound by the national interpretation of a provision when establishing what constitutes ‘normal’ national tax law as a reference framework for the assessment of compliance with State-aid law. In particular, that question arises here because the tax practice at issue, based on Article 185(2)(b) of CIR 92, is a well-established administrative practice in Belgium. In addition, the appeals allow the Court of Justice to determine who may be liable for recovery of the aid. In particular, the question arises whether the Commission may order recovery from the ‘corporate group’, that is to say, from all companies in a group, even if they were not addressees of the tax rulings.
II.    Legal framework
A.      European Union law
6.        The framework in EU law comprises Articles 107 and 108 TFEU.
B.      Belgian law
7.        In Belgium, the rules governing the taxation of income are codified in CIR 92. Under Article 1(1) of CIR 92, one of the forms of income taxation is a levy on the total income of resident companies, namely corporate income tax.
8.        By means of the Law of 21 June 2004 amending CIR 92 and amending the Law of 24 December 2002, (6) Belgium introduced new schemes for cross-border transactions between group companies, which provided for profit adjustments in cases of non-arm’s length arrangements.
9.        Article 185(2) of CIR 92 states:
‘For two companies that are part of a multinational group of associated companies and in respect of their reciprocal cross-border relationships:
(a)      when two companies are in their commercial and financial relationships linked by conditions agreed upon or imposed on them which are different from those which would have been agreed upon between independent companies, the profit which – under those conditions – would have been made by one of the companies but is not because of those conditions, may be included in the profit of that company;
(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 subparagraph applies by way of advance ruling without prejudice to the application of the Convention on the elimination of double taxation.’
10.      It is apparent from the explanatory memorandum to the law that the purpose of that provision is to apply the arm’s length principle in cross-border situations. (7)
11.      The position of the Belgian tax authorities on the interpretation of that provision is apparent from a circular of 4 July 2006, in which the explanatory memorandum to the law is essentially repeated. (8) In addition, the Belgian Minister for Finance has taken a position on the application of Article 185(2)(b) of CIR 92, in particular in response to several parliamentary questions. (9)
III. Facts and proceedings to date
A.      Background to the dispute
12.      In the period from 2004 to 2014, the authority responsible for issuing tax rulings, by means of 66 such rulings issued on the basis of Article 185(2)(b) of CIR 92, reduced the amount of profit taxable in Belgium for 55 companies established in Belgium which belonged to multinational groups.
13.      At the request of the taxpayers, the competent authority did not base its assessment on transfer prices determined by it, but compared the profits of the Belgian companies with the average profits of a comparable standalone company. (10) The result of that comparative analysis was a percentage expressing the divergence between the taxpayers’ actual profit and the hypothetical average profit of a standalone company. Profits corresponding to that percentage were not subject to tax in the following five years. At the request of the taxpayers, therefore, the nature and amount of the basis of assessment changed, in that it was no longer the profit actually realised (which, under Belgian tax law, reflects actual ability to pay) which served as the basis of assessment, but only a reduced amount of that profit. In that regard, it is perfectly reasonable to refer to taxation of a hypothetical average profit. (11)
14.      By the decision at issue, the Commission found that the profit reductions granted by the competent Belgian authority through that tax practice constituted State aid within the meaning of Article 107(1) TFEU which was incompatible with the internal market and which had been unlawfully implemented
by Belgium, in breach of Article 108(3) TFEU.
15.      Furthermore, the Commission ordered that the aid granted be recovered from the recipients, a definitive list of which was to be drawn up by Belgium at a later date. However, in the annex to the decision at issue, for informational purposes on the basis of information provided by Belgium, the Commission already lists 55 beneficiaries, including some of the appellants, such as Celio International SA. In addition, the Commission ordered that any sums remaining unrecoverable from the beneficiaries of the aid are to be recovered ‘from the corporate group to which the recipient belongs’.
B.      The proceedings before the General Court and the judgment under appeal
16.      Between 22 March and 25 November 2016, Belgium and several companies, including the appellants, brought actions for annulment of the decision at issue, registered as Cases T‑263/16, T‑265/16, T‑311/16, T‑319/16, T‑321/16, T‑343/16, T‑350/16, T‑444/16, T‑800/16 and T‑832/16.
17.      The appellants raised four pleas in law at first instance on the basis of almost identical applications. (12) In essence, they challenged the Commission’s findings that the tax practice at issue constituted an aid scheme, that it was selective and that it conferred an advantage and they also challenged the recovery of the aid ordered by the Commission.
18.      By decision dated 16 February 2018, the General Court, inter alia, stayed the proceedings in Cases T‑265/16, T‑311/16, T‑319/16, T‑321/16, T‑343/16, T‑350/16, T‑444/16, T‑800/16 and T‑832/16 – the cases giving rise to the judgment under appeal – pending final decision in Cases T‑131/16 and T‑263/16.
19.      By its judgment of 14 February 2019 (13) in Cases T‑131/16 and T‑263/16, the General Court annulled the decision at issue, as the Commission had erroneously found that the practice constituted an aid scheme. Following an appeal brought by the Commission against that judgment, the Court of Justice delivered its judgment on 16 September 2021. (14) By that judgment, it set aside the judgment of the General Court, as the Commission’s finding of an aid scheme was not objectionable, and referred the case back to the General Court. In the first set of proceedings, the General Court had not yet examined whether the tax rulings constituted State aid and whether the recovery of that aid had been correctly ordered. The General Court was to rule on those points in the second set of proceedings. (15)
20.      On 26 April 2022, the General Court decided, in accordance with Article 71(3) of the Rules of Procedure, to resume the proceedings in Cases T‑265/16, T‑311/16, T‑319/16, T‑321/16, T‑343/16, T‑350/16, T‑444/16, T‑800/16 and T‑832/16.
21.      By the judgment under appeal, dated 20 September 2023, the General Court dismissed the actions.
IV.    Proceedings before the Court of Justice
22.      The appellants lodged the present appeals on 6 December 2023. They claim that the Court of Justice should:
-      set aside the judgment under appeal;
-      annul the decision at issue;
-      in the alternative, annul Article 2 of the decision at issue;
-      in the further alternative, refer the case back to the General Court;
-      order the Commission to pay the costs of the present appeal proceedings and of the proceedings before the General Court.
23.      The Commission contends that the Court of Justice should dismiss the appeals and order the appellants to pay the costs.
24.      By decision of 18 January 2024, the President of the Court of Justice joined the two appeals for the purposes of the written and oral procedure and as well as for the purposes of the judgment.
25.      All parties have submitted written observations to the Court. In accordance with Article 76(2) of the Rules of Procedure of the Court of Justice, the Court decided not to hold a hearing.
V.      Legal assessment
26.      The appellants raise three grounds in support of almost identical appeals. By their first ground of appeal, they challenge the General Court’s finding that the Commission correctly defined the reference framework and correctly classified the tax practice at issue as a derogation from it (see Section A below). By their second ground of appeal, they complain that the General Court erred in holding the tax practice at issue
to be selective (see Section B below). Lastly, they claim that the General Court erred in law in its assessment of the lawfulness of the order for recovery of the aid (on that third ground of appeal, see Section C below). The appellant in Case C‑758/23 P, by an additional fourth ground of appeal, challenges the General Court’s finding that the aid can also be recovered from it.
A.      The first ground of appeal: determination of the reference framework
27.      By their first ground of appeal, which is divided into four complaints, the appellants claim, in essence, that the General Court erred in law when determining the reference framework. By their first complaint, they contend that the General Court unlawfully substituted its own reasoning for the reasoning – or absence thereof – in the decision at issue (see point 34 et seq. below). By their second complaint, the appellants object that, when determining the reference framework, the General Court failed to take account of the recognised practice for interpreting Article 185(2)(b) of CIR 92 in Belgium, wrongly relying instead on its own interpretation of Belgian law (see point 42 et seq. below).
28.      By their third and their fourth complaints, each raised in the alternative, the appellants then cite reasons why they consider that the General Court erred in law in its interpretation of Article 185(2)(b) of CIR 92 and, consequently, in its determination of the reference framework.
By the third complaint, they argue that the General Court erred in law by ruling that an adjustment in favour of the taxpayer
depended on a prior disadvantageous adjustment made by another tax authority (see point 67 et seq. below). Lastly, they complain that the General Court erred in law in finding that Article 185(2)(b) of CIR 92 did not allow an adjustment by reference to a ‘hypothetical profit’ (see point 69 et seq. below).
29.      The first and second complaints are the focal points of the following analysis, because if the General Court, when determining the reference framework, correctly disregarded the recognised interpretation practice in Belgium and did not err in law in confirming the reference framework determined by the Commission in the decision at issue – including its statement of reasons – it is no longer relevant whether the tax practice at issue derogates from the reference framework for other reasons too, in particular those challenged by means of the third and fourth complaints.
1.      Determination of the reference framework as a condition for the examination of State aid
30.      According to settled case-law of the Court, (16) classification as ‘State aid’ within the meaning of Article 107(1) TFEU requires that, first, there be intervention by the State or through State resources. Second, that intervention must be liable to affect trade between Member States. Third, it must confer a selective advantage on the beneficiary. Fourth, it must distort or threaten to distort competition.
31.      The only issue in the present case is the question whether a selective advantage has been conferred. In accordance with settled case-law
of the Court, (17) selectivity in tax measures must be determined in three stages. In the first stage, it is necessary to identify the ordinary or ‘normal’ tax regime which applies in the Member State concerned, in other words the reference framework. The second stage involves demonstrating, on the basis of that ordinary or ‘normal’ tax system, whether the tax measure at issue is a derogation from that ordinary system, in so far as it differentiates between operators which, in the light of the objective pursued by the ordinary system, are in a comparable factual and legal situation. Where a derogation from ‘normal taxation’ has been identified, the final stage is examining whether the derogation is justified.
2.      Findings of the General Court
32.      The General Court follows the line of argument adopted by the Commission in the decision at issue, according to which the tax practice at issue constitutes a derogation from Belgian tax law, which is the reference framework. (18) That practice, the General Court rules, is not prescribed in any of the provisions of CIR 92, nor can it, in particular, be justified on the basis of Article 185(2)(b) of CIR 92.
33.      The General Court holds that the Belgian tax authorities, by reducing profits through the tax rulings, systematically applied that provision contra legem. First, it states, the wording of Article 185(2)(b) of CIR 92 indicates that the provision applies only if there is a cross-border relationship between two associated companies and if the profit to be adjusted is also (19) included in the profit of the other company and if the profit so included is profit which should have been made by that other company if it had conducted its transactions on an arm’s length basis. (20) Second, the practice of exempting from corporate income tax a percentage of profit as excess profit has no basis in the wording of the law. (21)
3.      The first complaint within the first ground of appeal: the General Court unlawfully substituted its own reasoning for that presented by the Commission in the decision at issue
34.      The first complaint within the first ground of appeal, according to which the General Court substituted its own reasoning for that of the Commission, is ineffective.
35.      The appellants challenge the General Court’s finding that the Commission, in the decision at issue, did not exclude from the reference framework Article 185(2)(b) of CIR 92 as such but rather its (unlawful) application. Such a fact, they assert, does not emerge sufficiently clearly from the decision at issue. Particular account should be taken, they contend, of the fact that the Commission, in its opening decision, still considered that Article 185(2)(b) of CIR 92 itself derogated from the reference framework.
36.      It is settled case-law of the Court that the General Court cannot, under any circumstances, substitute its own reasoning for that of the author of a contested act. (22) Contrary to the appellants’ view, it is not apparent that the General Court substituted its own reasoning for that presented by the Commission in the decision at issue. It is clearly evident from the decision at issue that what derogates from the reference framework is not Article 185(2)(b) of CIR 92, but the tax practice at issue
which is based on that provision. In that way the Commission provides the clearest explanation of that position in particular in recital 125, which is found in Section 6.3.1.2, headed ‘The excess profit exemption is not an inherent part of the reference system’, stating that, ‘the excess profit exemption’ is not prescribed by any provision of CIR 92. Article 185(2)(b) of CIR 92 refers to specific transactions or arrangements between two related group entities. An abstract tax exemption, such as that granted under the tax practice at issue
is not covered by that.
37.      As is unmistakably clear from recital 1 of the decision at issue, ‘excess profit exemption’ means the tax practice at issue. The fact cited
by the appellants that Section 6.3.2, headed ‘The excess profit exemption is a derogation from the reference system’, does not contain any further explanations does not call into question the clarity of the reasoning in the decision at issue, first, because it is apparent from the heading, read in the light of the definition contained in recital 1, that the tax practice at issue derogates from the reference framework. Second, in that section the Commission examines whether the tax practice at issue ‘constitutes a derogation from that reference system, leading to unequal treatment between companies that are legally and factually in a similar situation in light of the objective pursued by that system’. (23) The Commission thus implements the second stage of the ‘three-stage test’ (see point 31 above). The Commission completed the determination of the reference framework (the first stage) with its – equally clear – conclusions. (24)
38.      As regards the further argument that the Commission changed its reasoning in the decision at issue compared to that in the opening decision
without expressly indicating that in the decision at issue, it is neither apparent nor has it been argued to what extent that circumstance could affect the contested replacement of the reasoning by the General Court.
39.      In so far as the appellants rely on an infringement of the right to submit comments within the meaning of Article 24(1) of Regulation 2015/1589 as an essential procedural rule, (25) they did not allege
such an
error of law either at first instance or on appeal. Even assuming that such an infringement can be examined ex officio at any stage of the proceedings, (26) no such infringement exists here.
40.      The right to submit comments merely requires that the relevant issues of fact and law be expressly and clearly mentioned in the opening decision. (27) Only then are the parties able to respond appropriately. The relevant issues of fact and law primarily include those that are to be examined with a view to the adoption of the final decision. (28) Consequently, greater involvement of the interested parties (or even the publication of a supplementary or amended opening decision) may be required if new facts are established or significant amendments to the relevant legal framework occur after the publication of the opening decision. (29)
41.      The Commission complied with those requirements. In the decision at issue, it merely clarified its preliminary (30) legal assessment under
Article 6 of Regulation 2015/1589 based on the opening decision, without referring to any
relevant new facts or amendment to the
legal framework. The opening decision indicates that the tax exemption for ‘excess profits’ derogates from ‘normal’ corporate tax law. (31) That reasoning – which was at times quite ambiguous in the opening decision – was clarified by the Commission in the decision at issue to the effect that, while Article 185(2)(b) of CIR 92 is part of the reference framework, it cannot serve as a basis for the tax practice at issue. It has neither been argued nor is it apparent how that clarification of the legal assessment could have impaired the appellants’ ability to submit their comments appropriately. They were free to present their assessment of the facts and the law in the formal investigation procedure. They did not avail themselves of that opportunity.
4.      The second complaint within the first ground of appeal: determination of the reference framework by the General Court
42.      By their second complaint within the first ground of appeal, the appellants claim that the General Court erred in upholding the Commission’s determination of the reference framework by disregarding the recognised practice for interpreting Article 185(2)(b) of CIR 92 in Belgium and relying instead on its own interpretation.
43.      To determine whether the General Court’s findings are vitiated by any error of law, I shall begin by setting out the limits within which the Commission and the EU Courts, when determining the reference framework (and hence the occurrence of a derogation from it) are bound by the Member State’s interpretation of a national tax provision (point 44 et seq. and point 49 et seq. below). (32) I shall then examine whether the General Court erred in law in applying that test and correctly judged that the tax practice at issue was not part of the reference framework (point 58 et seq. below).
(a)    Principle: being bound by the Member State’s assessment when determining the reference framework
44.      When determining the reference framework, the Commission and the EU Courts are bound, in principle, by the Member State’s configuration and interpretation of its national tax law. (33) The primary purpose of that binding effect of the national system is to safeguard the fiscal autonomy of Member States. It also reflects the principle of legality of taxation, which the Court of Justice has recognised as forming part of the legal order of the European Union as a general principle of law. (34)
45.      Consequently, the Court of Justice also rightly assumes that the Member States have a margin of discretion regarding aid schemes in the form of general tax laws and that the standard of review of the Commission and the EU Courts is correspondingly less stringent. (35) The Court has emphasised that, given the current state of harmonisation of EU tax law, the Member States are free to establish the system of taxation which they deem most appropriate. (36) That discretion enjoyed by the Member States extends to determining the characteristics constituting each tax and applies in particular to the implementation and configuration of the arm’s length principle for transactions between associated companies. (37)
46.      That is the sense in which the judgments of the Court of Justice in Commission v Amazon.com and Others and in Luxembourg and Others v Commission (38) must be understood. In the judgment in Luxembourg and Others v Commission, the Court of Justice stated that, when determining the reference framework, the Commission is, in principle, required to accept the interpretation of the relevant provisions of national law given by the Member State concerned, provided that that interpretation is compatible with the wording of those provisions. (39) In the judgment in Commission v
Amazon.com and Others, the Court found, among other things, that the Commission had unlawfully applied the OECD Guidelines on transfer pricing without having demonstrated that they had been, wholly or in part, explicitly adopted in Luxembourg law. (40)
47.      Developing that case-law, in the judgment in Prezydent Miasta Mielca the Court emphasised the fiscal autonomy of the Member States, stating that, when determining the fundamental characteristics of a tax, Member States may legitimately pursue, in addition to a purely budgetary objective, one or more other objectives, which then likewise constitute part of the relevant reference framework. (41) For that reason, the Court regarded a general exemption from property tax for land forming part of railway infrastructure, where that infrastructure was made available to rail carriers, as part of the reference framework. (42)
48.      In that respect, the starting point of the appellants’ complaint is correct, namely that the reference framework must be determined, in principle, on the basis of the Member State’s configuration and interpretation of its tax law.
(b)    Exception: manifestly inconsistent configuration or manifest application of the law contra legem
49.      The limits of that discretion enjoyed by Member States when determining the reference framework are exceeded where the tax law is configured in a manifestly inconsistent manner (point 53 below) or where the national authorities manifestly apply the tax law contra legem, and hence inconsistently (point 54 et seq. below). The standard of review to be applied is limited to a mere plausibility check (point 50 et seq. below).
(1)    Standard of review: the plausibility check
50.      The Commission and the EU Courts confine themselves to a plausibility check when reviewing whether the national tax laws are configured in an inconsistent manner or whether the national tax laws are being applied contra legem. (43)
51.      That limitation to a plausibility check protects the Commission and the EU Courts, first, from having to interpret correctly 27 different tax regimes in detail and so possibly becoming ‘overburdened’ by the sheer volume of material. (44) Second, it ensures that the Commission does not become a de facto supreme inspector of taxes and that the EU Courts, by dint of reviewing the Commission’s decisions, do not become de facto supreme tax courts. The fact is that, where review is confined to plausibility, not every simple error of law in a tax assessment constitutes a derogation from the reference framework. Consequently, the Commission and the EU Courts need not review all such errors for lawfulness. (45)
52.      It is therefore only necessary to examine, at EU level, whether the national tax laws
are configured in a manifestly inconsistent manner or whether their application by the national authorities is manifestly contra legem. That is the case where the configuration and application cannot be plausibly explained to a third party, such as the Commission or the EU Courts. (46)
(2)    Manifestly inconsistent configuration
53.      The limits of the discretion enjoyed by the Member States to configure their tax systems are exceeded where Member States abuse their tax law to confer advantages on individual companies in circumvention of the law on State aid. (47) Such an abuse of fiscal autonomy may be assumed in the case of a manifestly inconsistent configuration of tax law. (48) In its recent case-law, therefore, the Court has held that a general tax ruling imposing a tax burden is contrary to EU law where it has been configured according to manifestly discriminatory parameters intended to circumvent EU law on State aid. (49) General differentiations within national tax law are therefore not part of the reference framework if they have no rational basis within the reference framework, in other words within national tax law. (50)
(3)    Manifest application of the law contra legem
54.      The limits of the Member State’s discretion when determining the reference framework are also exceeded where the application of a national tax provision is manifestly at odds with its wording. Accordingly, where national authorities apply a tax provision in a manner which is manifestly at odds with its wording, the Commission and the EU Courts are not bound by that practice applying that provision when determining the reference framework.
55.      In that case, the national authorities are essentially repudiating the ‘normal’ national tax law adopted by the national legislature in the exercise of its fiscal autonomy. One effect of the principle of legality of taxation (51) is that the fiscal autonomy of the Member States is exercised primarily by the national legislature. It follows that national law is the primary reference point for determining the reference framework. Although the national authorities’ application of the law is the main factor, in principle, in that process, if the application of a law is manifestly at odds with its wording, the wording of the law takes precedence when it comes to determining the reference framework.
56.      Accordingly, the Court of Justice has stated in its recent case-law that, when determining the reference framework, the Commission is, in principle, required to accept the interpretation of the relevant provisions of national law given by the Member State concerned, ‘provided that that interpretation is compatible with the wording of those provisions’. (52)
57.      It therefore follows from fiscal autonomy, first, that the wording of the law constitutes the point of reference for the review of the reference framework. Second, the review of any derogation from the wording of the law is limited to a plausibility check. (53)
(c)    Application of the standard of review
58.      If that standard is applied, it emerges that the General Court did not err in law by upholding the reference framework determined by the Commission, in that it did not hold Article 185(2)(b) of CIR 92, but rather its manifestly unlawful application, to be a derogation from the reference framework, namely Belgian law on corporate income tax.
(1)    Whether Article 185(2)(b) of CIR 92 is manifestly inconsistent
59.      Article 185(2)(b) of CIR 92 is not manifestly inconsistent. On the contrary, it fits coherently into the Belgian tax system by seeking to ensure appropriate taxation in each country. At the same time, economic double taxation can thus be avoided within a multinational group when adjustments are made for transactions entered into on non-arm’s length terms which have influenced profits (the provision probably comes into play most frequently in cases of transfer pricing adjustments). (54)
60.      According to its wording, Article 185(2)(a) and (b) of CIR 92 allows the competent authority, for example, to adjust for tax purposes the prices of cross-border transactions between two companies of a multinational group in accordance with the arm’s length principle. That means that, for transactions between two associated companies, a price is imputed for tax purposes which independent companies would have agreed between them. Article 185(2)(a) of CIR 92 allows the profit determined on the basis of that (hypothetical) price to be attributed to the ‘correct’ company for tax purposes. Conversely, Article 185(2)(b) of CIR 92, by adjusting the price in accordance with the arm’s length principle, serves to reduce the profit arising from the cross-border transaction if it is also included in the other company’s profits. In that way, consideration of the adjusted transfer price in the other State can ultimately prevent economic double taxation of the same profit by two tax creditors.
(2)    Manifestly unlawful application of Article 185(2)(b) of CIR 92 through the tax practice at issue
61.      The Belgian authorities, by contrast, argue that the semantic content of Article 185(2)(b) of CIR 92 is designed to ensure that a Belgian company belonging to a multinational group is taxed only on the profit that a standalone company would also have made. Profits above that level correspond to the effects of synergy, economies of scale or other benefits drawn from participation in a multinational group, according to the Belgian authorities. Those advantages, they assert, would not exist for a comparable standalone company and are therefore to be exempted from tax. (55) That is why, at the request of the taxpayers, only the (hypothetical) profit of a comparable standalone company was taxed.
62.      That interpretation and the tax practice at issue which stems from it are manifestly not compatible with the wording of Article 185(2)(b) of CIR 92 and therefore do not form part of the reference framework.
63.      Article 185(2)(b) of CIR 92 presupposes ‘conditions agreed between the two companies’ being the same as ‘those which would have been agreed between independent companies’. As is apparent from the introductory sentence of Article 185(2) of CIR 92, moreover, that provision applies only in respect of the ‘reciprocal cross-border relationships’ between associated companies.
64.      The criterion of a specific cross-border business relationship and any conditions agreed in that context, however, play no part in the tax practice at issue. Profit reduction was granted independently of cross-border business relationships. It did not concern the application of the arm’s length principle to transfer prices, for example, but the reduction of the total profit of the Belgian company to a hypothetical profit. It is not even established to what extent the appellants agreed prices during the period in question for intra-group transactions (supplies and services) arising from cross-border relationships.
65.      That application of the provision, which is at odds with its wording, cannot be plausibly explained. The requirement of a specific cross-border business relationship and of the agreement of conditions between two companies may be inferred from that provision just as easily as the absence of those criteria in the tax practice at issue.
(d)    Interim conclusion
66.      The tax practice at issue
is manifestly not based on Article 185(2)(b) of CIR 92. Consequently, the General Court was right to confirm the Commission’s interpretation that that tax practice is not part of the reference framework but derogates from it. The second complaint within the first ground of appeal is therefore unfounded.
5.      The third and fourth complaints within the first ground of appeal
67.      In the remainder of the present Opinion, the question whether the tax practice at issue is also manifestly contrary to the wording of Article 185(2)(b) of CIR 92 in other respects may be left aside. Even if – as the appellants seek to demonstrate with their third and fourth complaints – there were no other manifest instances of being at odds with the wording, the first ground of appeal would be unfounded.
68.      This applies, first of all, to the appellants’ objection that the General Court wrongly regarded an initial adjustment already made abroad (the first upward revision of taxable profits) as a prerequisite for the application of Article 185(2)(b) of CIR 92. For the sake of completeness alone, it should be noted that the appellants’ line of argument is based on a misunderstanding of the judgment under appeal, since the General Court did not rely on the fact that the ‘excess profit’ exempted in Belgium was also taxed in the other State. (56) The General Court merely required that that profit also be included in the profits of another company in the group.
69.      Second, there is no need to rule on the merits of the fourth complaint within the first ground of appeal, in which the appellants claim that the Commission and the General Court erred in law in finding that Article 185(2)(b) of CIR 92 did not permit adjustment by reference to a ‘hypothetical profit’. On that point too, it is worth noting that the appellants have misunderstood the General Court’s considerations.
70.      More specifically, the appellants claim that the General Court erred in law by finding that the starting point for the determination of taxable income is not the profit actually realised, but a hypothetical profit which does not take account of the profit actually realised. That objection may be justified to the extent that the term ‘starting point’ (57) is misleading. According to the Commission’s portrayal, the national authorities, applying the tax practice at issue, determined the profit actually realised, compared it with the profit of a comparable independent company and then adjusted the group company’s taxable income to align it with the independent company’s profit and did not tax the excess profit. (58) Consequently, the basis of assessment was not the profit actually recorded but a hypothetical, supposedly ‘arm’s length profit’. Irrespective of the potentially misleading use of the term ‘starting point’, the General Court based the considerations set out in paragraph 99 of its judgment on the approach referred to above, as is evident from its other considerations. (59)
6.      Conclusion on the examination of the first ground of appeal
71.      The General Court therefore correctly found that the Commission was right not to regard the tax practice at issue as part of the reference framework for Belgian corporate income tax, as its interpretation was manifestly contra legem. The appellants’ first ground of appeal is therefore unfounded.
B.      The second ground of appeal: classification as a selective measure
72.      By the second ground of appeal, the appellants challenge the General Court’s finding that the Commission did not err in law in stating that the tax practice at issue
constitutes a selective measure.
73.      That objection concerns the question to be examined at the second stage, namely whether the tax measure at issue is a derogation from the ordinary system, in so far as it differentiates between economic operators which, in the light of the objective pursued by the ordinary system, are in a comparable factual and legal situation (see point 31 above).
74.      In the appellants’ view, none of the three reasons put forward by the Commission and confirmed by the General Court justifies such unequal treatment of comparable companies by the tax practice at issue. Since the three reasons independently support the assumption of unequal treatment, the appellants’ ground of appeal is only well founded if all the reasons prove to be incorrect. Conversely, the second ground of appeal must be rejected if any of the reasons proves to be valid.
1.      Discrimination against standalone companies and companies belonging to a purely domestic corporate group
75.      According to the General Court’s findings, the excess profit exemption leads to a selective disadvantage for companies that are not part of a multinational group. (60) That is because the aim of the Belgian corporate income tax system is to tax all profits of taxable companies, regardless of whether they are independent or belong to a multinational group. (61)
76.      By contrast, the tax practice at issue granted the beneficiaries a tax reduction by allowing them to deduct part of their profits from their tax base without those tax-exempt profits being included in the profits of another company in the group. (62) Consequently, companies belonging to a multinational group were treated differently from other companies, whose entire profits were taxed under the normal rules governing Belgian corporate income tax. (63)
77.      The appellants argue that the situation of companies forming part of a multinational group is not comparable to that of companies which do not belong to a corporate group or which belong to a purely domestic group.
78.      It must therefore be examined whether, in terms of the objective pursued by the reference framework (uniform taxation of profits based on actual ability to pay), the factual and legal situation of companies belonging to multinational groups is comparable to that of standalone companies and of companies belonging to domestic groups.
79.      It is true that the appellants rightly object that, unlike multinational groups, companies with purely domestic operations are not exposed to the risk of double taxation which may result from the adjustment of transfer prices.
80.      However, the tax practice at issue does not actually address that risk of double taxation, since it does not require the existence of a cross-border transaction. Rather, the tax practice at issue is configured in such a way that it offers beneficiaries the option of switching from taxation of profits actually realised (which reflects the actual ability to pay) to taxation based on the hypothetical average profit of a standalone company. That ultimately means that taxpayers belonging to a multinational group can choose whether to pay corporate income tax on a certain part of their actual profits. That choice is not available to a standalone company.
81.      Given the aim of taxing corporate profits on the basis of ability to pay, it follows that the risk of double taxation cannot justify the unequal treatment which resulted from the tax practice at issue. In that regard, the factual and legal situation of companies in multinational groups is comparable to that of standalone companies and companies in domestic groups. The bottom line is that the aim of uniform taxation of profits is not achieved if multinational companies are only required to pay tax on part of their profits corresponding to a hypothetical average profit, whereas all other taxpayers are required to pay tax on their actual profits in full.
82.      Since the tax reduction is not available to the same extent to all taxpayers but only to Belgian companies in multinational groups, the General Court did not err in law in finding that the tax practice at issue discriminates between companies which, in terms of the aim of the general system, namely uniform taxation of profits based on ability to pay, are in a comparable factual and legal situation.
83.      Consequently, for that reason alone, the second ground of appeal is unconvincing. The Commission and the General Court did not err in law when they assumed unequal treatment.
2.      Discrimination against companies, inter alia, not making investments in Belgium
84.      There is no need to examine, in that context, whether the two other distinctions raised by the Commission, and considered by the General Court to be free from any error of law, (64) also give rise to unequal treatment of economic operators in a comparable factual and legal situation. (65) As has just been shown, there is already unequal treatment between companies belonging to multinational groups of companies on the one hand and standalone companies and companies belonging to a purely domestic corporate group, on the other (see point 78 et seq. above).
3.      Conclusion on the examination of the second ground of appeal
85.      Since the General Court was right to dismiss the objection to the classification of the tax practice at issue as a selective measure, the second ground of appeal is likewise unfounded.
C.      The third ground of appeal: legality of the recovery order
86.      The third ground of appeal is directed against the General Court’s finding that the recovery order in the decision at issue was lawful.
87.      By the first complaint within the third ground of appeal, the appellants claim that the General Court disregarded the fact that the recovery order infringed the principle of the protection of legitimate expectations. They could not have expected that the exemption for their excess profits, which was granted in accordance with the consistent and publicly known practice of the Belgian administration, would be regarded as incompatible State aid (see point 89 et seq. below).
88.      They consider unlawful, moreover, the order contained in Article 2(2) of the decision at issue, specifying that any sums which remain unrecoverable from the recipients of aid are to be recovered ‘from the corporate group to which the recipient belongs’ (with regard to the second complaint within the third ground of appeal, see point 96 et seq. below).
1.      The principle of the protection of legitimate expectations
89.      According to the findings of the General Court, the appellants did not argue that they received a precise assurance from the Commission that might have caused them to entertain justified expectations that the Commission would not have regarded exemptions granted by advance rulings as unlawful and incompatible State aid. (66) They merely asserted that they could not have anticipated that the tax practice at issue would be classified as aid. Recovery did not therefore infringe the principle of the protection of legitimate expectations. (67)
90.      There can be no objection to those findings. In essence, the first complaint within the third ground of appeal raises the question of the degree of legitimacy of the appellants’ expectations regarding tax rulings issued on the basis of a – continuing – interpretation of national tax law which is manifestly incompatible with the wording of that national tax law.
91.      The Court of Justice has consistently held that recovery of unlawful aid is the logical consequence of the finding that it is unlawful. (68)
92.      It is true that the recovery obligation is limited by the principle of protection of legitimate expectations, which is a general principle of EU law within the meaning of Article 16 of Regulation 2015/1589. It is apparent from the settled case-law of the Court of Justice, however, that considerations of legitimate expectations only preclude recovery in exceptional cases. The Court of Justice has ruled, for example, that the right to rely on the principle of the protection of legitimate expectations applies only to someone in a situation in which an EU institution, by giving that person precise assurances, has led him or her to entertain well-founded expectations. (69)
93.      In contrast, in the light of the principle of effectiveness, it is claimed that assurances from the Member State do not suffice. (70) The mere fact that a certain tax treatment was promised in an advance tax ruling by national authorities could not, by itself, justify legitimate expectations from the perspective of EU law.
94.      Whether such an interpretation of the principle of the protection of legitimate expectations is ultimately convincing can remain undecided here. (71) That is because legitimate expectations do not merit protection if the error in the application of the law was readily apparent to the taxpayer. The (obviously unlawful) assurance in the form of an advance tax ruling cannot alter that. Consequently, a taxpayer cannot rely on legitimate expectations if a provision is obviously interpreted contrary to its wording and that interpretation is assured in an advance tax ruling. As explained above, the tax practice at issue
was manifestly contrary to the wording of Belgian corporate tax law (see point 61 et seq.).
95.      Accordingly, the principle of the protection of legitimate expectations does not preclude recovery of the aid in the present case. The General Court did not err in law when reaching that finding.
2.      Recovery from the members of the corporate group
96.      By the second part of the third ground of appeal, the appellants claim that the General Court erred in law in assuming that the aid was also, in the alternative, to be recovered from the other companies in the group, even though they were not addressees of the tax ruling.
97.      According to the findings of the General Court, the order for recovery pursuant to
Article 2(2) of the decision at issue contained no error of law. (72) The Commission may assume that two or more natural and legal persons form one economic unit when a relationship of control exists between them. (73) Consequently, the General Court holds, it suffices for recovery from the other group companies if the Commission finds that the Belgian company, on the basis of its core functions within the group, exercises control over the other group companies. (74)
98.      I consider those findings of the General Court to be vitiated by an error of law.
99.      Under Article 16 of Regulation 2015/1589, unlawful aid is to be recovered from the beneficiary. According to the case-law of the Court of Justice, a beneficiary of aid is the entity which actually benefited from the aid. (75)
100. The source of the reference to actual benefit is the fact that State-aid law does not have an inherently punitive purpose vis-à-vis the beneficiary. On the contrary, the prohibition of aid is addressed to the (Member) State, and the obligation to recover unlawful aid serves to eliminate the competitive advantages associated with the aid. (76) The recipient has to surrender the advantage which it had gained over its competitors, and the situation prior to payment of the aid is thus restored. (77) The aim, in other words, is to remove advantages obtained in breach of EU law.
101. That, moreover, is not at odds with the case-law cited by the General Court in the grounds of the judgment under appeal. On the contrary, it actually encapsulates that principle.
102. In fact, what the cases cited by the General Court (78) have in common is that restructuring and asset transfers were undertaken by the recipients after aid had been awarded to them. As a result, legal entities came into being which had not been recipients of the original aid yet benefited, as a kind of legal successor, from the advantages provided by the aid.
103. In Intermills v Commission, as part of a State-aided restructuring measure, the Intermills company created three legally independent manufacturing companies, to which it transferred its production activity (including all of its plants). Intermills continued to have a stake in the newly created manufacturing companies. In spite of their legal independence, the Court held that the original Intermills company plus the three newly created manufacturing companies formed a single economic unit, which could be regarded as a recipient of aid within the meaning of EU law on State aid. (79)
104. In AceaElectrabel Produzione v Commission, a State-aided restructuring measure transferred electricity generation from the Italian energy supplier ACEA to the generating company AEP, in which ACEA retained an economic interest as a holding company. The Court of Justice regarded ACEA and AEP as a single economic unit. (80)
105. Contrary to the view of the General Court, therefore, it cannot be concluded from the case-law referred to that a supposed controlling position based on the performance of core functions within a group suffices for an economic unit to be regarded as the recipient of State aid. On the contrary, the decisive factor in both decisions was who derived the actual benefit from the aid.
106. The Court of Justice has formulated that rule accordingly in more recent decisions in cases regarding economic continuity too. According to those decisions, aid must be recovered from the company which carries on the economic activity of the undertaking which initially benefited from the advantage associated with the grant of State aid and which, therefore, retains the actual benefit thereof. (81)
107. In the present case, therefore, the lawfulness of the recovery depends on the other group companies having also derived actual benefit from the aid at issue granted by Belgium.
108. The fact that the Court of Justice interprets the concept of an undertaking ‘broadly’ in connection with Articles 101 and 102 TFEU makes no difference in that respect. That practice enables the Court to extend penalties for anticompetitive behaviour to associated companies. (82) In that interpretation, the term ‘undertaking’ covers any entity engaged in an economic activity, irrespective of its legal status and the way in which it is financed, even if in law that economic unit consists of several persons, natural or legal. (83) That concept of an undertaking follows from the principle that a formal legal separation between companies cannot outweigh the unity of their conduct on the market for the purposes of applying the rules on competition. (84)
109. Although Articles 101 and 102 as well as Article 107 TFEU are found in the chapter headed ‘Rules on competition’ and are designed, respectively, to ensure the functioning of the internal market and to prevent distortions of competition, the means by which those aims are to be achieved – and their underlying rationale – differ so widely that they call for different interpretation. While the protection of competition, under Articles 101 and 102 TFEU, involves prohibiting practices – particularly collusion – on the part of private competitors, Article 107 TFEU primarily targets intervention by Member States. That distinction is reflected in the scheme of the relevant TFEU chapter, which is divided into Section 1 – ‘Rules applying to undertakings’ – and Section 2 – ‘Aids granted by States’.
110. The decisive factor, then, is the difference between the functions performed by the concept of an undertaking in the respective sections. The ‘broad’ concept of an undertaking in the context of Articles 101 and 102 TFEU serves to assign responsibility for anticompetitive practice. Accordingly, it seems logical, in cases where a subsidiary, while possessing its own legal personality, does not determine its market behaviour independently but essentially follows the parent company’s instructions, that case-law regards the two as a single economic unit. (85) If the subsidiary engages in anticompetitive practices in such cases, that is attributable to the anticompetitive instructions of the parent company. The concept is thus interpreted in the light of the protective purpose, namely to prevent anticompetitive practices and ultimately to ensure effective enforcement of the rules on competition.
111. That contrasts with anticompetitive practice on the part of a Member State in the State-aid scenario. In that case, a ‘broad’ concept of an undertaking would result in the attribution to third parties of the actual benefit conferred on a particular aid recipient. It cannot therefore be decisive whether the recipient of the State aid (the subsidiary, for example) is acting on the instructions of the third party (the parent company, for example), because it cannot be concluded from that fact that the third party has gained any actual benefit. On the contrary, it is for the Commission to establish the facts which – as in the cases cited above – suggest that the actual benefit has passed to a third party as a kind of legal successor. (86)
112. In the context of the tax practice at issue, the actual benefit consisted in the receipt of an advance tax ruling in which a particular taxation of profits was assured. Those tax rulings, evidently, were not addressed to a ‘corporate group’ under what is known as a group taxation regime but to a specific company within a group. That company was thus the beneficiary of the tax ruling and hence the beneficiary of aid within the meaning of Article 16 of Regulation 2015/1589. The Commission did not identify any circumstances through which the other companies in the group acquired the advantage conferred by the tax rulings.
113. Consequently, the General Court’s finding that the Commission could also order recovery of the aid from the other group companies is vitiated by an error of law.
3.      Conclusion on the examination of the third ground of appeal
114. The General Court did not err in law in finding that the principle of the protection of legitimate expectations had no bearing on the lawfulness of the decision at issue. The finding that the Commission was entitled to order recovery from the other group companies, however, was vitiated by an error of law. The second complaint within the third ground of appeal is therefore well founded. To that extent, the judgment under appeal must be set aside. Since that objection was the subject of an exchange of arguments in court and no further measures of organisation of procedure are necessary, the state of proceedings permits final judgment to be given (first paragraph of Article 61 of the Statute of the Court of Justice of the European Union). Consequently, Article 2(2) of the decision at issue is to be annulled.
D.      The fourth ground of appeal: transfer pricing agreement as aid for the purposes of the tax practice at issue
115. By the fourth ground of appeal, the appellant in Case C‑758/23 alleges that the General Court erred in law in confirming that the tax reductions granted to it are to be recovered. That appellant claims in particular that it did not receive an advance tax ruling, but concluded a transfer pricing agreement with the Belgian tax administration, which did not fall under the tax practice at issue.
116. That ground of appeal cannot succeed. The Commission did not actually make the alleged order that the tax reductions granted to the appellant under the transfer pricing agreement are to be recovered. In Article 1 of the decision at issue, the Commission finds that the tax practice at issue constitutes aid that is incompatible with the internal market. In that provision, it describes the tax practice at issue as a scheme ‘pursuant to which Belgium granted tax rulings’. In Article 2 of the decision at issue, the Commission orders the recovery of the aid referred to in Article 1. The Commission did not state at any point that transfer pricing agreements also fall under the tax practice at issue or, independently of that practice, constitute aid that is incompatible with the internal market. It is true that the appellant is referred to in the ‘List of rulings granted under the contested scheme’ annexed to the decision at issue. However, that list has no legal effects. As the Commission makes clear in the decision at issue, that ‘list of beneficiaries provided by Belgium and annexed to this decision is only regarded by the Commission as illustrative’. (87) Accordingly, the General Court was not able to confirm the recovery order which is alleged by the appellant but was not made in reality.
117. The General Court correctly held that in a decision on aid the Commission is not required to carry out an analysis of the aid granted in individual cases under such a scheme. (88) It is necessary to look at the individual situation of the appellant at the stage of recovery of the aid. (89) If, against that background, the appellant’s submission proves to be correct, and it was not therefore a beneficiary of the tax practice at issue, recovery is excluded.
118. However, in so far as the General Court states in its further reasoning (seemingly presented only in the alternative) that the agreement was equivalent, in substance, to the tax practice at issue, (90) the General Court exceeded its jurisdiction, as the subject matter of the proceedings is the decision at issue. That decision does not contain any findings on whether the agreement concluded by the Belgian tax administration with the appellant constitutes aid. Although such a finding certainly cannot be ruled out, it is not the subject of the decision at issue. Because, however, the grounds of the judgment under appeal support the operative part even without those statements, that exceeding of jurisdiction by the General Court does not lead to the judgment under appeal being set aside. (91)
E.      Conclusion on the examination of the grounds of appeal
119. The third ground of appeal is well founded in part. The remainder of the grounds of appeal is unfounded. Consequently, the judgment under appeal should be set aside to the extent indicated and the appeals should be dismissed as to the remainder. Article 2(2) of the decision at issue must be annulled.
F.      Costs
120. Under Article 184(2) of the Rules of Procedure, where the appeal is well founded and the Court of Justice itself gives final judgment in the case, the Court is to make a decision as to the costs. That is the case here.
121. Under Article 138(3) of the Rules of Procedure, which applies to the appeal proceedings by virtue of Article 184(1) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party.
122. In the circumstances of the present case, it appears justified that the appellants should bear the costs alone. The appeals
are successful to a minimal extent, that is to say, only in respect of the third complaint within the third ground of appeal. As far as can be ascertained, the setting aside of the judgment and the annulment of the decision at issue bring the appellants no direct economic advantage, because recovery from the other group companies was merely ordered in the alternative. It is therefore appropriate that the annulment of Article 2(2) of the decision at issue should have no impact on the cost decision.
VI.    Conclusion
123. In the light of all of
the foregoing, I propose that, in Cases C‑757/23 P and C‑758/23 P, the Court should:
(1)      Set aside point 2 of the operative part of the judgment of 20 September 2023, Magnetrol International and Others v Commission (T‑263/16 RENV, T‑265/16, T‑311/16, T‑319/16, T‑321/16, T‑343/16, T‑350/16, T‑444/16, T‑800/16 and T‑832/16, EU:T:2023:565) in so far as in it, the General Court dismissed the action against the order, in the alternative, for recovery of the sums of aid from the groups of companies to which the recipients of aid belong (Article 2(2) 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);
(2)      Annul Article 2(2) of Decision 2016/1699;
(3)      Dismiss the
appeals as to the remainder;
(4)      Order the appellants to pay the costs of the appeal proceedings.
1      Original language: German.
2      Judgment of 20 September 2023, Magnetrol International and Others v Commission (T‑263/16 RENV, T‑265/16, T‑311/16, T‑319/16, T‑321/16, T‑343/16, T‑350/16, T‑444/16, T‑800/16 and T‑832/16, EU:T:2023:565).
3      That concerns the proceedings in Cases C‑734/23 P and C‑735/23 P, C‑736/23 P, C‑737/23 P to C‑742/23 P, C‑752/23 P, C‑754/23 P, and C‑755/23 P and C‑756/23 P.
This Opinion corresponds, in essence, to the statements made in my Opinion in Case C‑752/23 P.
The only new statements are those in point 115 et seq. concerning recovery of tax reductions granted under transfer pricing agreements.
4      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).
5      Transfer prices are the prices at which an enterprise transfers physical goods and intangible property or provides services to associated enterprises; see OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, pp. 13 and 14.
6      Moniteur belge of 9 July 2004.
7      Paragraphs 89, 90 and 93 of the judgment under appeal and recital 34 of the decision at issue.
8      Paragraphs 91 and 93 of the judgment under appeal, making reference to recital 38 of the decision at issue.
9      See paragraphs 97 and 98 of the judgment under appeal, making reference to recitals 39 to 42 of the decision at issue as well as the statement of the Minister for Finance of 30 November 2023, produced as Annex A.6.
10      On the following observation, see paragraph 99 of the judgment under appeal.
11      In fact, a percentage was determined which was obtained by comparing an estimated hypothetical average profit of a standalone company with an estimated actual profit of the taxpayer. That percentage was deducted from the taxpayer’s actual profits in the following five years.
12      On the following observation, see paragraph 36 of the judgment under appeal.
13      Judgment of 14 February 2019, Belgium and Magnetrol International v Commission (T‑131/16 and T‑263/16, EU:T:2019:91).
14      Judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741).
15      Judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741, paragraphs 156 to 158, 169 and 170).
16      Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 36); of 5 December 2023; Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 105); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraph 27).
17      On the following observations, see judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 44); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 107); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraphs 31 and 32).
18      Paragraph 82 et seq. of the judgment under appeal, in particular paragraph 102.
19      It is true that the English-language version of the judgment refers to ‘already included’, rather than ‘also included’. However, it is clear from the statements of the General Court and from a comparison with, inter alia, the French-language version (‘également repris’), that that is a translation error.
20      Paragraph 92 of the judgment under appeal.
21      Paragraph 95 of the judgment under appeal.
22      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 70 and the case-law cited).
23      Recital 130 of the decision at issue.
24      Recital 129 of the decision at issue.
25      See specifically judgment of 29 July 2024,
Koiviston Auto Helsinki v Commission (C‑697/22 P, EU:C:2024:641, paragraph 45 and the case-law cited).
26      See judgment of 7 May 1991, Oliveira v Commission
(C‑304/89, EU:C:1991:191, paragraphs 17 and 18); see also judgment of 11 September 2025, Austria v Commission (Paks II nuclear power station) (C‑59/23 P, EU:C:2025:686, paragraph 99) concerning a lack of reasoning to be examined ex officio.
27      With regard to the following comments, see judgment of 29 July 2024, Koiviston Auto Helsinki v Commission
(C‑697/22 P, EU:C:2024:641, paragraph 49 and the case-law cited).
28      Judgment of 29 July 2024, Koiviston Auto Helsinki v Commission (C‑697/22 P, EU:C:2024:641, paragraph 51).
29      Judgment of 29 July 2024, Koiviston Auto Helsinki v Commission (C‑697/22 P, EU:C:2024:641, paragraph 52 and the case-law cited).
30      It is in the nature of a preliminary assessment that it may change or become more precise in the course of the investigation.
31      Recital 84 of the decision of 3 February 2015 concerning measure SA.37667 (2015/C) (ex 2015/NN), tax rulings on excess profits in Belgium – Article 185(2)(b) CIR92 (OJ 2015 C 188, p. 24 (41)).
32      See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 91 et seq.); in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:383, point 86 et seq.); and in Tesco-Global Áruházak (C‑323/18, EU:C:2019:567, point 147 et seq.).
33      See my Opinion in Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 27).
34      Judgments of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 119), and of 8 May 2019, Związek Gmin Zagłębia Miedziowego (C‑566/17, EU:C:2019:390, paragraph 39); see my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:383, point 99).
35      See judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 56); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 115 et seq.); and of 8 November 2022, Fiat Chrysler Finance Europe v Commission (C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraph 95 et seq.).
36      Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 48); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 112), and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraph 37); see also, to that effect, with regard to fundamental rights, judgments of 3 March 2020, Vodafone Magyarország (C‑75/18, EU:C:2020:139, paragraph 49); and of 3 March 2020, Tesco-Global Áruházak (C‑323/18, EU:C:2020:140, paragraph 69 and the case-law cited).
37      Judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 42), and of 8 November 2022, Fiat Chrysler Finance Europe v Commission (C‑885/19 P and C‑898/19 P, EU:C:2022:859, paragraph 95 et seq.).
38      Judgments of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985), and of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948).
39      Judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 120).
40      Judgment of 14 December 2023, Commission v Amazon.com and Others (C‑457/21 P, EU:C:2023:985, paragraph 56).
41      Judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 51).
42      Judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 80).
43      See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 101).
44      See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 98 et seq.) and in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, points 94 and 95).
45      See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 96).
46      See my Opinions in Commission v Luxembourg and Others (C‑457/21 P, EU:C:2023:466, point 94) and in
Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 92).
47      Judgment of 15 November 2011, Commission and Kingdom of Spain v Government of Gibraltar and United Kingdom (C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 96 to 107).
48      See my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑454/21 P and C‑451/21 P, EU:C:2023:383, point 91).
49      Judgments of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 53); of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 114); of 16 March 2021, Commission v Hungary (C‑596/19 P, EU:C:2021:202, paragraphs 48 and 49); and of 16 March 2021, Commission v Poland (C‑562/19 P, EU:C:2021:201, paragraphs 42 and 43).
50      See my Opinions in Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 34) and in Tesco-Global Áruházak (C‑323/18, EU:C:2019:567, point 151).
51      On that point, see judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 119). That principle requires that all the essential elements defining the substantive features of a tax must be regulated by the national legislature.
52      Judgment of 5 December 2023, Luxembourg and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 120).
53      If, on the basis of such a review, the EU institutions conclude that the national authorities are manifestly applying national tax law contra legem, a tax practice based on that application is not part of the reference framework but derogates from it. Whether it also constitutes a selective advantage must be established by means of the second and third stages of the
three-stage test referred to above (point 31). See judgment of 29 April 2025, Prezydent Miasta Mielca (C‑453/23, EU:C:2025:285, paragraph 60), and my Opinion on the same case, Prezydent Miasta Mielca (C‑453/23, EU:C:2024:898, point 28).
54      Transfer prices are the prices at which an enterprise transfers physical goods and intangible property or provides services to associated enterprises; see OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, pp. 13 and 14.
55      Belgium’s view is set out in recital 14 of the decision at issue.
56      Paragraphs 93 and 94 of the judgment under appeal.
57      Paragraph 99 of the judgment under appeal.
58      Recitals 15 to 20 of the decision at issue.
59      Paragraph 51 of the judgment under appeal.
60      Paragraph 105 et seq. of the judgment under appeal.
61      Paragraph 107 of the judgment under appeal.
62      Paragraph 108 of the judgment under appeal.
63      Paragraph 110 of the judgment under appeal.
64      Paragraph 111 et seq. and paragraph 119 et seq. of the judgment under appeal.
65      See the further statements in my Opinion in Cases C‑734/23 P and C‑735/23 P (point 89 et seq.).
66      On the following observations, see paragraph 133 of the judgment under appeal.
67      Paragraph 135 of the judgment under appeal.
68      Leading judgment of 21 March 1990, Belgium v Commission (C‑142/87, EU:C:1990:125, paragraph 66).
69      Judgments of 5 March 2019, Eesti Pagar (C‑349/17, EU:C:2019:172, paragraph 97), and of 16 December 2010, Kahla Thüringen Porzellan v Commission (C‑537/08, EU:C:2010:769, paragraph 63), each with further references.
70      See, for example, judgment of 20 March 1997, Alcan Deutschland (C‑24/95, EU:C:1997:163, paragraph 34 et seq.).
71      That could be doubtful in so far as tax rulings are a classic instrument for the national tax authorities to ensure legal certainty; see my Opinion in Luxembourg v Commission and Engie Global LNG Holding and Others v Commission (C‑451/21 P and C‑454/21 P, EU:C:2023:383, point 169).
72      Paragraph 155 of the judgment under appeal.
73      Paragraph 151 of the judgment under appeal.
74      Paragraphs 152 and 153 of the judgment under appeal.
75      Judgment of 29 April 2004, Germany v Commission (C‑277/00, EU:C:2004:238, paragraph 75).
76      Judgments of 5 March 2019, Eesti Pagar (C‑349/17, EU:C:2019:172, paragraph 131); of 8 December 2011, Residex Capital IV (C‑275/10, EU:C:2011:814, paragraph 34); and of 29 April 2004, Germany v Commission (C‑277/00, EU:C:2004:238, paragraph 76).
77      Judgments of 5 March 2019, Eesti Pagar (C‑349/17, EU:C:2019:172, paragraph 131); of 8 December 2011, Residex Capital IV (C‑275/10, EU:C:2011:814, paragraph 34); and of 29 April 2004, Germany v Commission (C‑277/00, EU:C:2004:238, paragraph 75).
78      Judgments of 14 November 1984, Intermills v Commission (323/82, EU:C:1984:345, paragraph 11), and of 16 December 2010, AceaElectrabel Produzione v Commission (C‑480/09 P, EU:C:2010:787, paragraph 64).
79      Judgment of 14 November 1984, Intermills v Commission (323/82, EU:C:1984:345, paragraph 11).
80      Judgment of 16 December 2010, AceaElectrabel Produzione v Commission (C‑480/09 P, EU:C:2010:787, paragraphs 63 and 64).
81      Judgments of 16 January 2025, Scai (C‑588/23, EU:C:2025:23, paragraph 40), and of 29 July 2024, Koiviston Auto Helsinki v Commission (C‑697/22 P, EU:C:2024:641, paragraphs 79 and 81).
82      Judgment of 27 April 2017, Akzo Nobel and Others v Commission (C‑516/15 P, EU:C:2017:314).
83      Judgments of 6 October 2021, Sumal (C‑882/19, EU:C:2021:800, paragraph 41); of 27 April 2017, Akzo Nobel and Others v Commission (C‑516/15 P, EU:C:2017:314, paragraphs 47 and 48); and of 10 September 2009, Akzo Nobel and Others v Commission (C‑97/08 P, EU:C:2009:536, paragraphs 54 and 55).
84      Judgment of 6 October 2021, Sumal (C‑882/19, EU:C:2021:800, paragraph 41); see earlier judgments of 14 December 2006, Confederación Española de Empresarios de Estaciones de Servicio (C‑217/05, EU:C:2006:784, paragraph 41); and of 14 July 1972, Imperial Chemical Industries v Commission (48/69, EU:C:1972:70, paragraph 140).
85      Judgment of 27 April 2017, Akzo Nobel and Others v Commission (C‑516/15 P, EU:C:2017:314, paragraph 52).
86      Alternatively, the Commission could simply make recovery from the other group companies conditional upon the actual acquisition of the advantage.
87      Footnote 132 to the decision at issue.
88      Paragraph 31 of the judgment under appeal.
89      See judgment of 16 September 2021, Commission v Belgium and Magnetrol International (C‑337/19 P, EU:C:2021:741, paragraph 77).
90      Paragraphs 33 and 34 of the judgment under appeal. See also the reply of the Commission.
91      See judgment of 2 September 2010, Commission v Deutsche Post (C‑399/08 P, EU:C:2010:481, paragraph 75 and the case-law cited).