JUDGMENT OF THE GENERAL COURT (Fifth Chamber)
6 November 2024 (*)
( State aid – Madeira Free Zone – Aid scheme implemented by Portugal – Decision finding that the scheme does not comply with Decisions C(2007) 3037 final and C(2013) 4043 final, declaring that scheme to be incompatible with the internal market and ordering recovery of aid paid under it – Obligation to state reasons – Concept of ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation (EU) 2015/1589 – No derogation from the condition relating to the creation or maintenance of jobs in the Autonomous Region of Madeira – Principle of sound administration – Principle of sincere cooperation – Legitimate expectations – Legal certainty )
In Case T‑462/22,
Millennium BCP Participações, SGPS, Sociedade Unipessoal, Lda, established in Funchal (Portugal),
BCP África, SGPS, Lda, established in Funchal,
represented by B. Santiago, L. do Nascimento Ferreira, P. Gouveia e Melo, D. Oda and A. Queiroz Martins, lawyers,
applicants,
v
European Commission, represented by I. Barcew and P. Caro de Sousa, acting as Agents,
defendant,
THE GENERAL COURT (Fifth Chamber),
composed of J. Svenningsen, President, J. Martín y Pérez de Nanclares (Rapporteur) and M. Stancu, Judges,
Registrar: L. Ramette, Administrator,
having regard to the written part of the procedure, in particular:
–        the decision of 17 January 2023 not to stay the proceedings pending the decision of the Court of Justice closing the proceedings in the case which subsequently gave rise to the judgment of 4 July 2024, Portugal v Commission (Madeira Free Zone) (C‑736/22 P, not published, EU:C:2024:579);
–        the measure of organisation of procedure of 18 July 2023 by which the General Court requested the European Commission to provide the notifications and the correspondence which it exchanged with the Portuguese authorities in the administrative proceedings relating to Cases N 421/2006 and SA.34160 (2011/N);
–        the replies from the Commission lodged at the Court Registry of the General Court on 28 August 2023 by which it stated that it was unable to communicate the documents by reason of the general presumption of confidentiality which they enjoyed in State aid proceedings;
–        the order of 26 September 2023 by which the Court requested the production of the documents at issue by way of a measure of inquiry pursuant to Article 91(b) and Article 92(3) of its Rules of Procedure;
–        the decision of 8 November 2023 by which the Court ruled on the relevance and the absence of confidentiality of the documents produced pursuant to the order of 26 September 2023 given that they were more than five years old and did not contain particularly sensitive data,
further to the hearing on 20 February 2024,
gives the following
Judgment
1        By their action under Article 263 TFEU, the applicants, Millennium BCP Participações, SGPS, Sociedade Unipessoal, Lda and BCP África, SGPS, Lda, seek annulment of Article 1 and Article 4(1) of Commission Decision (EU) 2022/1414 of 4 December 2020 on aid scheme SA.21259 (2018/C) (ex 2018/NN) implemented by Portugal for Zona Franca da Madeira (ZFM) – Regime III (OJ 2022 L 217, p. 49) (‘the contested decision’), in so far as they apply to sociedades gestoras de participações sociais (holding companies, or SGPS companies) (‘holding companies’).
Background to the dispute
2        The Madeira Free Zone scheme in Madeira (Portugal) (‘the MFZ’) takes the form of various tax benefits granted in the framework of the Centro Internacional de Negócios da Madeira (International Business Centre of Madeira), the Registo Internacional de Navios da Madeira (International Shipping Register of Madeira) and the Zona Franca Industrial (Industrial Free Trade Zone).
3        That scheme was initially approved by the Commission decision of 27 May 1987 in Case N 204/86 (SG(87) D/6736) as regional aid compatible with the single market. The extension of that scheme was subsequently authorised by the Commission decision of 27 January 1992 in Case E 13/91 (SG(92) D/1118) and then by the Commission decision of 3 February 1995 in Case E 19/94 (SG(95) D/1287).
4        Its successor scheme (‘Regime II’) was authorised by a decision of the Commission of 11 December 2002 in Case N 222/A/01.
5        Under the Guidelines on national regional aid for 2007-2013 (OJ 2006 C 54, p. 13), a third scheme (‘Regime III’) was authorised by the Commission decision of 27 June 2007 in Case N 421/2006 (‘the 2007 decision’) for the period from 1 January 2007 to 31 December 2013. The Commission authorised that scheme as operating aid compatible with the internal market aiming at the promotion of regional development and diversification of the economic structure of Madeira, as an outermost region within the meaning of Article 349 TFEU.
6        Regime III takes the form of a reduction in corporate income tax (CIT) on profits resulting from activities effectively and materially performed in Madeira (3% from 2007 to 2009, 4% from 2010 to 2012 and 5% from 2013 to 2020), an exemption from municipal and local taxes and an exemption from tax on the transfer of immovable property for the setting up of a business in the MFZ, up to maximum aid amounts based on the taxable base ceilings applicable to the beneficiaries’ annual taxable base. Those ceilings are set according to the number of jobs held by the beneficiary each year. In certain circumstances, companies registered in the MFZ Industrial Free Trade Zone can benefit from a further 50% reduction in CIT.
7        Access to Regime III was restricted to the activities set out in a list included in the 2007 decision. In addition, all financial intermediation, insurance and auxiliary financial and insurance-related activities and all ‘intra-group services’ activities (coordination, treasury and distribution centres), as ‘services provided mainly to companies’, were excluded from the scope of Regime III.
8        An amended version of Regime III was authorised by the Commission decision of 2 July 2013 in Case SA.34160 (2011/N) (‘the 2013 decision’) for the period from 1 January to 31 December 2013. That version retains the terms laid down by Regime III, although with an increase of 36.7% in the taxable base ceilings to which the reduction in CIT applies.
9        Subsequently, the extension until 30 June 2014 of Regime III, as amended, was authorised by the decision issued by the Commission on 26 November 2013 in Case SA.37668 (2013/N). The extension of that scheme until the end of 2014 was authorised by the Commission decision of 8 May 2014 in Case SA.38586 (2014/N).
10      On 12 March 2015, under Article 108(1) TFEU and Article 17(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), the Commission commenced a monitoring exercise in respect of Regime III relating to 2012 and 2013.
11      By letter of 6 July 2018, the Commission informed the Portuguese Republic that it had decided to initiate the formal investigation procedure under Article 108(2) TFEU in relation to Regime III (OJ 2019 C 101, p. 7).
12      That procedure was initiated as a result of the Commission’s doubts concerning, first, the application of the tax exemptions for income from activities effectively and materially performed in the Autonomous Region of Madeira (‘the ARM’) and, second, the link between the amount of the aid and the creation or maintenance of genuine jobs in Madeira.
13      On conclusion of that procedure, the Commission adopted the contested decision, the operative part of which reads as follows:
‘Article 1
The aid scheme “Zona Franca da Madeira (ZFM) – Regime III”, to the extent that it was implemented by Portugal in breach of [the 2007 decision] and of [the 2013 decision], was unlawfully put into effect by Portugal in breach of Article 108(3) [TFEU] and is incompatible with the internal market.
Article 2
Individual aid granted under the scheme referred to in Article 1 does not constitute aid if, at the time it is granted, it fulfils the conditions laid down by a regulation adopted pursuant to Article 2 of Regulation (EU) 2015/1588 which is applicable at the time the aid is granted.
Article 3
Individual aid granted under the scheme referred to in Article 1 which, at the time it is granted, fulfils the conditions laid down by the decisions referred to in Article 1 or laid down by a regulation adopted pursuant to Article 1 of Regulation … 2015/1588 is compatible with the internal market up to maximum aid intensities applicable to that type of aid.
Article 4
1.      Portugal shall recover the incompatible aid granted under the scheme referred to in Article 1 from the beneficiaries.
…
4.      Portugal shall abolish the incompatible aid scheme to the extent referred to in Article 1 and cancel all outstanding payments of aid with effect from the date of notification of this Decision.
Article 5
1.      Recovery of the aid granted under the scheme referred to in Article 1 shall be immediate and effective.
2.      Portugal shall ensure that this Decision is implemented within eight months following the date of notification of this Decision.
…’
14      The applicants are holding companies established in the ARM and are therefore subject to the applicable rules of Portuguese law.
15      Under Article 1(1) of Decreto-Lei no 495/88 (Decree-Law No 495/88) of 30 December 1988, which lays down the detailed legal rules governing holding companies, the sole business purpose of holding companies is to manage the shares of other companies.
16      The applicants were granted a licence to operate in the MFZ in 1998 for the predecessor undertaking of Millennium BCP Participações and in 1996 for the predecessor undertaking of BCP África. They ceased to be covered by Regime III on 31 December 2020 and their licences to operate in the MFZ were maintained until mid-2021.
17      During the period of application of Regime III, the applicants did not have any employees.
Forms of order sought
18      The applicants claim that the Court should:
–        annul Article 1 and Article 4(1) of the contested decision in so far as they apply to holding companies;
–        order the Commission to pay the costs.
19      The Commission contends that the Court should:
–        dismiss the action;
–        order the applicants to pay the costs.
Law
20      In support of their action, the applicants put forward three pleas in law alleging, first, an infringement of the obligation to state reasons, second, an error of law in so far as the Commission included holding companies in the group of beneficiaries covered by the recovery obligation in the event of non-compliance with the condition relating to the creation or maintenance of jobs in the ARM and, third, a breach of the principles of protection of legitimate expectations and legal certainty.
The first plea in law, alleging an infringement of the obligation to state reasons
21      The applicants assert that, as companies benefiting from Regime III, they are potentially affected by the obligation to recover aid set out in recitals 213 and 214, which identify the beneficiaries from which aid must be recovered, and in Article 4 of the contested decision. However, the failure in the contested decision to make any specific reference to beneficiaries of Regime III whose legal nature corresponds to that of holding companies constitutes an infringement of the obligation to state reasons laid down in Article 296 TFEU.
22      The applicants submit that the contested decision refers, in recital 36, to exchanges which took place between the Commission and the Portuguese authorities in the administrative proceedings leading to the adoption of the contested decision, during which the Portuguese authorities claimed that access to Regime III for holding companies was not subject to compliance with the condition relating to the creation or maintenance of jobs in the ARM. That derogation was included in the planned aid scheme notified to the Commission on 28 June 2006 and in the annexes thereto (‘the 2006 notification’) and, more specifically, in the Estatuto dos Benefícios Fiscais (Tax Incentives Statute) proposed by the draft decree-law accompanying that notification (‘the notified draft decree-law’).
23      The Commission, which disagreed with that approach taken by the Portuguese authorities, should therefore have provided even brief information on the main facts and points of law on which it had relied in adopting the contested decision in respect of holding companies.
24      The Commission disputes that argument.
25      According to case-law, the statement of reasons required under the second paragraph of Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the competent court to exercise its jurisdiction to review legality (see judgment of 8 March 2017, Viasat Broadcasting UK v Commission, C‑660/15 P, EU:C:2017:178, paragraph 43 and the case-law cited). It is not necessary for the reasoning 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 (see judgment of 25 July 2018, Commission v Spain and Others, C‑128/16 P, EU:C:2018:591, paragraph 82 and the case-law cited).
26      In the present case, it should be noted that in recitals 213 and 214 and in Articles 1 to 4 of the contested decision the Commission provided the Portuguese authorities with the necessary information, which was also sufficient, enabling them to identify the beneficiaries of Regime III, as implemented, and to determine themselves, without excessive difficulty, the amount of aid to be repaid by those beneficiaries (see, to that effect, judgments of 21 September 2022, Portugal v Commission (Madeira Free Zone), T‑95/21, under appeal, EU:T:2022:567, paragraph 231, and of 21 June 2023, Região Autónoma da Madeira v Commission, T‑131/21, not published, under appeal, EU:T:2023:348, paragraph 178).
27      It should be noted at the outset that the recovery obligation does not apply to all individual aid paid pursuant to Regime III, but only to that paid in breach of the 2007 and 2013 decisions, provided that the beneficiaries of the aid do not fulfil the conditions laid down by a de minimis regulation or a block exemption regulation, as is clear from Articles 1 to 3 of the contested decision.
28      In that regard, as is stated in recitals 213 and 214 of the contested decision, the Portuguese authorities must determine whether, between 1 January 2007 and 31 December 2014, each beneficiary of Regime III complied with the necessary conditions to benefit from that regime, as approved in the 2007 and 2013 decisions.
29      On the one hand, that entails determining the proportion of the beneficiary’s income linked to ‘activity effectively and materially performed in Madeira’, to the exclusion of income generated by activities performed outside the ARM, even if they are carried out by companies established in that region. On the other hand, the Portuguese authorities must determine, on the basis of an objective method, the number of jobs created or maintained in Madeira by each beneficiary.
30      That methodology for calculating the amount of aid to be recovered is based on the finding made in recitals 167 and 179 of the contested decision, where the Commission found that the implementation of Regime III by the Portuguese Republic in respect of the conditions relating, first, to the origin of the profits to which the reduced CIT applies and, second, to the creation or maintenance of jobs in the ARM was in breach of the 2007 and 2013 decisions.
31      With regard, in particular, to the condition of creating or maintaining jobs in the ARM, which is the only condition at issue in the present case, the Commission noted, first of all, in recital 169 of the contested decision, that it was expressly stated in the 2007 decision (see, in particular, recital 64 thereof) and in the 2013 decision (see, in particular, recital 28 thereof) that it was a condition to access Regime III and had been embedded in the method of calculation of the aid amount in the MFZ scheme as notified by the Portuguese Republic and approved by those two decisions.
32      Second, in recital 171 of the contested decision, the Commission recalled that the number of jobs was a way of measuring the contribution of Regime III to regional development in the ARM. In that regard, it is clear from the 2007 and 2013 decisions that the Commission’s assessment of the proportionality of that scheme was carried out in the light of that condition.
33      Furthermore, in recitals 175 and 176 of the contested decision, the Commission stated that the method employed by the Portuguese authorities to calculate the number of jobs did not allow them to verify the time actually spent by the jobholder in that post. Although they did not prescribe a specific method for calculating the number of jobs created or maintained in the ARM by each beneficiary, the 2007 and 2013 decisions nevertheless required the use of an objective method making it possible to check the reality and the permanence of the jobs declared by the beneficiaries of Regime III.
34      Moreover, it is evident from recitals 36 and 62 of the contested decision that the Commission was aware of the Portuguese authorities’ view that the 2007 decision had implicitly approved all the provisions of the notified draft decree-law, including, therefore, the derogation for holding companies from the condition relating to the creation or maintenance of jobs in the ARM.
35      The abovementioned recitals of the contested decision indicate sufficiently clearly that the Commission implicitly but necessarily found that the condition of creating or maintaining jobs in the ARM applied to all undertakings registered in the MFZ, including holding companies, and therefore that the 2007 and 2013 decisions had not authorised any derogation from that condition.
36      That statement of reasons is sufficient to enable the applicants to assess the merits of the contested decision and the Court to exercise its power of review.
37      It is apparent from the contested decision that the Commission did not recognise classification of aid paid under Regime III as ‘existing aid’ within the meaning of Article 1(b)(ii) 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) unless it complied with the condition of creating or maintaining jobs in the ARM, since it claims that it had not authorised any derogation from that condition for holding companies.
38      Thus, given that Regime III, as authorised, had been implemented in a manner which differed substantially from that taken into consideration in assessing whether that scheme was compatible with the internal market, the Commission classified Regime III, as implemented, as ‘unlawful aid’, and therefore as ‘new aid’ within the meaning of Article 1(c) of Regulation 2015/1589, which had been paid in breach of Article 108(3) TFEU.
39      The question whether the Commission was entitled to take the view that it had not authorised any derogation from the condition of creating or maintaining jobs in the ARM and, consequently, that aid paid to holding companies had been paid in breach of the 2007 and 2013 decisions is a matter of the merits of the contested decision. That question will therefore be examined in the context of the second plea in law.
40      In the light of the foregoing, the Commission did not therefore infringe the second paragraph of Article 296 TFEU.
41      It follows that the first plea in law must be rejected as unfounded.
The second plea in law, alleging an error of law in so far as the Commission included holding companies in the group of beneficiaries covered by the recovery obligation in the event of non-compliance with the condition relating to the creation or maintenance of jobs in the ARM
42      In the first place, the applicants assert that holding companies are not subject to the condition for access to Regime III relating to the creation or maintenance of jobs in the ARM, with the result that the contested decision is vitiated by an error of law in so far as holding companies are included in the group of beneficiaries covered by the obligation to recover aid granted under Regime III.
43      First, the applicants submit that, as was ruled in the judgment of 13 July 2021 of the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal), attached to the application as Annex A.10, the draft decree-law notified to the Commission in 2006 and subsequently approved must be considered to contain the derogation for holding companies from the condition of creating or maintaining jobs in the ARM.
44      According to the applicants, that derogation formed an integral part of the aid measure approved by the Commission, which is consistent with the fact that there was no disagreement, reservation or even separate analysis by the Commission in the contested decision as regards the applicability of Regime III to holding companies.
45      In that regard, if the Commission did actually consider that holding companies were required to satisfy the condition of creating or maintaining jobs in the ARM in order to be eligible for Regime III and that they should thus be covered by the recovery order stemming from the contested decision, that should have been expressly stated in that decision.
46      Second, the applicants claim that, as was ruled in the judgment of 13 July 2021 of the Supremo Tribunal Administrativo (Supreme Administrative Court), it makes no sense to make access to Regime III for holding companies subject to the condition of creating or maintaining jobs in the ARM given the nature of the activity performed by holding companies. It would be completely pointless to provide such employment in order to fulfil their business purpose, which is to manage shares.
47      Third, the contribution to regional development in the ARM for the purposes of Regime III could have taken forms other than creating and maintaining jobs and been measured, for example, in terms of the stimulation of the local economy through the aid granted and tax revenue generated.
48      Fourth, a literal analysis of the 2007 decision shows that that decision expressly mentions that the legal basis of Regime III is the notified draft decree-law, which included the derogation for holding companies. Furthermore, the rules actually adopted that introduced Regime III all mention that that scheme is approved in accordance with the 2007 decision. In addition, it cannot be determined from contextual elements that the 2007 decision and the subsequent changes to Regime III did not cover the derogation envisaged for holding companies.
49      In the second place, the applicants claim that their activity is included in the list of activities eligible for Regime III.
50      According to recital 25 of the 2007 decision, the scope of Regime III was limited to a set of economic activities which included ‘real estate activities, rentals and services for businesses (section K, codes 70-74)’ in accordance with the European Union Nomenclature of Economic Activities (NACE) which was in force at the time.
51      In addition, according to the applicants, one of the categories mentioned in division 74 of the NACE as it applied at the time of the 2007 decision is class ‘74.15. Management holding services’, which correlates with the business purpose of the applicants.
52      The Commission disputes that argument.
The subject matter of the second plea in law
53      By their second plea in law, the applicants maintain, in essence, that aid paid to them under Regime III corresponds to the aid authorised by the Commission in 2007 and in 2013, since they submit that, on the basis of a derogation for holding companies forming an integral part of Regime III, as notified, they were not subject, as holding companies, to the condition of creating or maintaining jobs in the ARM.
54      In that regard, it should be noted that, where an applicant claims that the Commission has found, incorrectly, that the manner of implementing the payment of individual aid under a previously authorised aid scheme did not comply with that prior authorisation, that party’s arguments must be understood as criticising the Commission for refusing to afford that aid the legal classification of ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation 2015/1589, that is to say, as an aid scheme or individual aid authorised by the Commission or the Council of the European Union (judgment of 21 September 2022, Portugal v Commission (Madeira Free Zone), T‑95/21, under appeal, EU:T:2022:567, paragraph 100).
55      Consequently, the second plea in law should be understood as seeking, in essence, to challenge the fact that, in recitals 150 to 180 and 228 and Article 1 of the contested decision, the Commission did not treat Regime III, as implemented, as ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation 2015/1589, the compatibility of which should have been assessed in the context of the constant review of existing aid schemes provided for in Article 108(1) TFEU, but instead classified it, in recital 180 of the contested decision, as ‘unlawful’ aid and, accordingly, as ‘new aid’ within the meaning of Article 1(c) of Regulation 2015/1589, in breach of Article 108(3) TFEU.
Merits of the second plea in law
56      As a preliminary point, it should be noted that in assessing whether individual aid paid to holding companies under Regime III, as implemented, corresponds to the aid authorised by the 2007 and 2013 decisions, the Court is required to consider not only the actual text of those decisions, but also the content of the notification made by the Portuguese Republic (see, to that effect, order of 22 March 2012, Italy v Commission, C‑200/11 P, not published, EU:C:2012:165, paragraph 27). Similarly, a request for additional information, by which the Commission requests further information on the scope of an aid scheme notified by a Member State, as well as the reply by the national authorities to that request, must be considered to be an indivisible part of the notified aid scheme (judgment of 16 December 2010, Kahla Thüringen Porzellan v Commission, C‑537/08 P, EU:C:2010:769, paragraph 45).
57      It should also be recalled that a Member State which seeks to be allowed to grant aid by way of derogation from the FEU Treaty rules has a duty to collaborate with the Commission. In pursuance of that duty, it must provide all the information necessary to enable the Commission to verify that the conditions for the derogation sought are fulfilled (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, paragraph 147 and the case-law cited). That duty is expressly reflected in recital 6 of Regulation No 659/1999 – which was applicable at the time of the adoption of the 2007 and 2013 decisions – according to which, ‘in accordance with Article [4(3) TEU], Member States are under an obligation to cooperate with the Commission and to provide it with all information required to allow the Commission to carry out its duties under [that] Regulation’.
58      Accordingly, in a situation such as that at issue, where the beneficiaries of a previously authorised aid scheme dispute that that scheme was implemented in a manner which differed substantially from that authorised, the classification of aid paid to them as ‘existing aid’ or ‘new aid’ depends not only on the actual text of the authorisation decisions, but also on the content of the notification made by the Member State concerned and on the further information provided by it. In this context, account must also be taken of the conduct of that Member State in connection with the notification of that scheme in the light of its duty to collaborate with the Commission.
59      It follows in particular that the applicants cannot criticise the Commission for having made an error of legal classification in taking the view that Regime III had been implemented in a manner which differed substantially from that authorised if, when Regime III was notified in 2006 and in 2011, the Portuguese Republic failed to provide that institution with the information required to allow it to assess the compatibility with the internal market of a derogation from the condition relating to the creation or maintenance of jobs in the ARM.
60      It is in the light of those considerations that the scope of the 2007 and 2013 decisions should be determined.
–       The scope of the 2007 decision
61      The applicants’ main argument is, in essence, first, that the amendment of the Tax Incentives Statute that followed the 2007 decision reproduced the wording of the draft decree-law which accompanied the 2006 notification as an attachment and, second, that, by its judgment of 13 July 2021, the Supremo Tribunal Administrativo (Supreme Administrative Court) confirmed that the Tax Incentives Statute, as amended, had to be interpreted as containing the derogation at issue.
62      It must be noted in that respect that, first, by its judgment of 13 July 2021, the Supremo Tribunal Administrativo (Supreme Administrative Court) held that the Tax Incentives Statute in force following the 2007 decision, as notified to the Commission in 2006, contained a derogation from the condition relating to the creation or maintenance of jobs in the ARM for holding companies and that, second, the 2007 decision that approved Regime III, as notified, does not make explicit reference to any derogation for such companies.
63      Against that background, it must therefore be determined whether the failure in the 2007 decision to mention a derogation scheme applying to holding companies means that, in authorising the implementation of Regime III, as notified in 2006, the Commission found that derogation scheme to be compatible with the internal market and, accordingly, also authorised its implementation for holding companies.
64      In that regard, it is true that, according to case-law, where the Commission finds, at the conclusion of the preliminary examination stage established in Article 108(3) TFEU, that the notified measure constitutes ‘State aid’, for the purposes of Article 107(1) TFEU, which does not raise any doubts as to its compatibility with the internal market, it is to adopt a decision not to raise objections, by which it declares that that measure is compatible with the internal market, under Article 107(3) TFEU (judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 64).
65      Similarly, in a decision adopted after a preliminary examination under Article 4(3) of Regulation No 659/1999, the Commission may only approve planned aid as notified and cannot impose or prohibit any action by the Member State concerned (see, to that effect, judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 72).
66      However, as was recalled in paragraph 56 above, the interpretation of the scope of such a decision cannot depend solely on the content of that decision, but must also have regard to the content of the notification made by the Member State concerned.
67      The explanations provided by the national authorities regarding the statutory legal basis of the notified measure thus form an integral part of the proposed aid as notified. Therefore, the Commission decision concerns the notified measure itself and the explanations provided by the national authorities taken together (see, to that effect, judgment of 19 September 2019, FIH Holding and FIH v Commission, T‑386/14 RENV, not published, EU:T:2019:623, paragraph 52 and the case-law cited).
68      It should further be noted that the Commission is not obliged to examine of its own motion and by way of guesswork what matters might have been brought before it during the administrative procedure (judgment of 28 March 2012, Ryanair v Commission, T‑123/09, EU:T:2012:164, paragraph 104).
69      It must therefore be examined whether the Portuguese authorities validly notified the derogation at issue in 2006 and whether, in doing so, they allowed the Commission to assess its compatibility with the internal market.
70      In that respect, it is clear from the 2006 notification as a whole and from the subsequent correspondence between the Commission and the Portuguese authorities that the derogation at issue was mentioned only in the legal bases accompanying the notification.
71      The only mentions of the derogation at issue in the 2006 notification, of which there are two, can be found, first, in the wording of Article 34(5) of the Tax Incentives Statute included in the pre-existing Decree-law No 163/2003 of 24 July 2003 (Annex 1 to the 2006 notification) and, second, in the same terms, in Article 34A(5) of that statute proposed by the notified draft decree-law (Annex 2 to the 2006 notification).
72      Thus, Article 34A(1) to (5) of the Tax Incentives Statute contained in the draft decree-law notified to the Commission, which formed the legal basis for Regime III, is worded as follows:
‘(Special regime applicable to entities approved in the Madeira Free Zone from 1 January 2007)
1.      The income of entities authorised, from 1 January 2007 to 31 December 2013, to carry on industrial, commercial and maritime transport activities and other services not excluded from this regime which comply with the respective conditions set out in Article 33(1) shall be subject to [CIT] until 31 December 2020, on the following terms:
(a)      from 2007 to 2009, at a rate of 3%;
(b)      from 2010 to 2012, at a rate of 4%;
(c)      in 2013 and subsequent years, at a rate of 5%.
…
5.      The income of holding companies approved from 1 January 2007 until 31 December 2013 shall be subject to [CIT] under the conditions set out in paragraph 1, excluding income obtained in Portuguese territory with the exception of free zones or in other Member States of the European Union, which shall be taxed under general conditions.’
73      On the other hand, there was no mention of that derogation in the 2006 notification form or in the accompanying explanatory memorandum.
74      First, it is not expressly stated in the wording of Article 34A(5) of the Tax Incentives Statute as proposed by the notified draft decree-law that the condition of creating or maintaining jobs does not apply to holding companies. That paragraph simply states that the income of holding companies approved from 1 January 2007 until 31 December 2013 is subject to CIT under the conditions set out in paragraph 1 of that article, excluding income obtained in Portuguese territory with the exception of free zones or in other Member States of the European Union, which is taxed under general conditions.
75      Second, it can reasonably be concluded from reading the explanatory statement for the notified draft decree-law, as well as Article 34A(1), (2) and (5) and Article 33(1)(g) of the Tax Incentives Statute proposed by the draft decree-law, that the condition relating to the creation or maintenance of jobs in the ARM, as a condition to access Regime III, also applies to holding companies.
76      The explanatory statement for the notified draft decree-law mentions that the creation or maintenance of jobs is a condition to access Regime III.
77      In addition, under Article 34A(1) of the Tax Incentives Statute proposed by the notified draft decree-law, Regime III is applicable not only to undertakings authorised to carry on industrial, commercial and maritime transport activities, but also to undertakings providing ‘other services not excluded from this regime’. In that regard, the applicants, as holding companies, provided services of managing the shares of other companies, which could reasonably be considered to be other services not excluded from Regime III in accordance with Article 34A(1) of the Tax Incentives Statute as proposed by the notified draft decree-law.
78      Article 34A(1) of the Tax Incentives Statute contained in the notified draft decree-law makes undertakings authorised to carry on industrial, commercial and maritime transport activities, but also undertakings providing ‘other services not excluded from [Regime III]’, subject to the condition of complying with the ‘respective conditions set out in Article 33(1)’ of that statute. In that regard, Article 33(1)(g) of the Tax Incentives Statute explicitly refers to the conditions applicable to holding companies.
79      Furthermore, Article 34A(2) of the Tax Incentives Statute proposed by the notified draft decree-law states that the entities referred to in paragraph 1 of that article are subject to the condition of creating or maintaining jobs in the ARM in order to be eligible for Regime III. Therefore, as it follows from paragraph 78 above that the applicants’ activities may be considered to be ‘other services not excluded from [Regime III]’ and are therefore covered by paragraph 1, paragraph 2 logically implies that holding companies are subject to the condition of creating or maintaining jobs in the ARM.
80      Lastly, it is clear from the scheme of Article 34A(5) of the Tax Incentives Statute proposed by the notified draft decree-law that the profits obtained by holding companies in Portuguese territory with the exception of free zones or in other EU Member States are taxed under general conditions and cannot therefore be part of the income to which the reduction in CIT may be applied.
81      In the light of the foregoing, it must be stated that, at the time of the notification of the notified draft decree-law by the Portuguese Republic, the Commission could reasonably interpret Article 34A of the Tax Incentives Statute to the effect that, like all undertakings eligible for Regime III, holding companies were subject to the condition of creating or maintaining jobs in the ARM.
82      Third, it is apparent from the 2006 notification that the Portuguese authorities’ intention was to require any undertaking wishing to benefit from Regime III to create or maintain jobs in the ARM. That is clear, on the one hand, from the fact that the Portuguese authorities made clear in the explanatory memorandum accompanying the 2006 notification that since Regime II the creation or maintenance of jobs in the ARM had been mandatory and a condition for access to the aid scheme applicable in the MFZ, as well as from the explanatory statements for the pre-existing decree-law and the notified draft decree-law, which explicitly state that the condition of creating or maintaining jobs in the ARM constitutes a necessary condition for access to Regimes II and III, and, on the other hand, from the fact that the Portuguese authorities did not provide any explanations regarding the exceptional situation of holding companies.
83      It follows from the foregoing that the Portuguese authorities never drew the Commission’s attention to the fact that the notified draft decree-law could be applied such that it would permit holding companies to benefit from Regime III without being subject to the condition relating to the creation or maintenance of jobs in the ARM. Accordingly, by the 2006 notification and the subsequent exchanges, the Portuguese Republic did not provide the Commission with all the information required to allow it, first of all, to establish that, pursuant to the notified draft decree-law, holding companies could enjoy a derogation from the condition of creating and maintaining jobs in the ARM in order to benefit from Regime III. Therefore, that institution was neither invited nor placed in a position to examine whether such a derogation was compatible with the FEU Treaty and, consequently, to form an opinion in that regard, even though, in practice, the derogation applying to holding companies resulted in such undertakings benefiting from State aid granted in much more advantageous conditions than those laid down by the general scheme applicable to other undertakings.
84      That conclusion cannot be called into question by the subsequent interpretation given to the legal basis for Regime III by the judgment of 13 July 2021 of the Supremo Tribunal Administrativo (Supreme Administrative Court).
85      First, it is clear from paragraph 56 above that the Commission was obliged to assess not only the legal basis in isolation, as was done by the Supremo Tribunal Administrativo (Supreme Administrative Court), but the 2006 notification as a whole and its annexes as well as the subsequent correspondence, since the explanations provided by the national authorities regarding the statutory legal basis for the notified measure form an integral part of the proposed aid as notified.
86      Second, if the Supremo Tribunal Administrativo (Supreme Administrative Court) found it necessary to rule on the existence of the derogation at issue, it is precisely because the Portuguese tax authorities took the view in 2011 that, in order to be eligible for Regime III, holding companies, like any approved entity operating in the MFZ, must comply with the condition of creating or maintaining jobs in the ARM and did not therefore enjoy the derogation at issue. Furthermore, it is evident from that judgment that in 2017 the Portuguese authorities themselves denied that the draft decree-law notified in 2006 and ultimately approved by the Commission included the derogation for holding companies, a position that they maintained during the proceedings before the Supremo Tribunal Administrativo (Supreme Administrative Court).
87      Third, it should also be noted that in the proceedings before the Supremo Tribunal Administrativo (Supreme Administrative Court), the opinion issued by the representative of the public prosecutor’s office was in favour of upholding the appeal brought by the representative of the Portuguese Treasury against the judgment delivered at first instance by the Tribunal Administrativo e Fiscal do Funchal (Administrative and Tax Court, Funchal, Portugal) and therefore in favour of an interpretation to the effect that holding companies did not enjoy any derogation from the condition relating to the creation or maintenance of jobs in the ARM. The fact that, in its judgment of 13 July 2021, the Supremo Tribunal Administrativo (Supreme Administrative Court) eventually opted for the opposite solution demonstrates to the requisite legal standard that, up to that time, differences in interpretation not only were possible, but also actually existed in the national legal order.
88      The conclusion in paragraph 83 above is also not called into question by the applicants’ arguments alleging, in essence, a breach of the right to sound administration in so far as the Commission failed to conduct a diligent examination of the 2006 notification.
89      In that respect, it is true that the Commission is required, in the interests of sound administration of the fundamental rules of the FEU Treaty relating to State aid, to conduct a diligent and impartial examination of the contested measures, so that it has at its disposal, when adopting the final decision, the most complete and reliable information possible for that purpose (see judgment of 10 November 2022, Commission v Valencia Club de Fútbol, C‑211/20 P, EU:C:2022:862, paragraph 78 and the case-law cited).
90      However, in the present case, it should be observed that there is no mention of the derogation from the condition relating to the creation or maintenance of jobs in the ARM for holding companies in the 2006 notification form or in the accompanying explanatory memorandum. Therefore, the Portuguese authorities did not make the Commission aware that such a derogation had been submitted to it for the purposes of its assessment; nor did the Portuguese authorities explain how the derogation was proportionate to the objective pursued by the aid and compatible with the internal market, when the condition of creating or maintaining jobs was a condition to access Regime III, particularly in so far as it served to quantify the contribution to the objective of regional development and the level and proportionality of the advantages conferred.
91      In those circumstances, the Commission cannot be criticised for having infringed the principle of sound administration or for having failed in its duty to act with diligence by not realising that a provision on which the Portuguese authorities had not provided explanations could be interpreted as permitting a derogation from the condition relating to the creation or maintenance of jobs in the ARM.
92      It must be concluded that if it was the Portuguese authorities’ intention to submit the derogation from the condition relating to the creation or maintenance of jobs for holding companies for assessment by the Commission, the principle of sincere cooperation to which they were subject should have led them to draw the Commission’s attention more fully to the existence of such a derogation, which raises doubts as to its compatibility with the internal market, and, consequently, to provide explanations regarding that compatibility.
93      Therefore, it must be found that, in the absence of having been validly notified, a derogation from the condition relating to the creation or maintenance of jobs in the ARM cannot be considered to have been authorised by the 2007 decision. Consequently, the Commission did not err by refusing to treat aid paid to holding companies under Regime III, as authorised in 2007, without complying with that condition, as ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation 2015/1589.
–       The scope of the 2013 decision
94      It should be noted at the outset that, unlike the 2007 decision, the 2013 decision does mention, in recital 19, an undertaking given by the Portuguese Republic to ‘eliminate any preferential treatment of entities such as [holding companies] if it is confirmed that their treatment in the MFZ actually confers an advantage compared with the Portuguese general scheme applicable to holding companies’.
95      In that regard, it is apparent from the correspondence exchanged between the Commission and the Portuguese authorities that that undertaking followed the request for supplementary information made by the Commission in its letter of 29 February 2012, by which it requested the Portuguese Republic to comment on the fact that, according to the website of the International Business Centre of Madeira, holding companies were able to benefit from aid under Regime III without being subject to the condition relating to the creation or maintenance of jobs in the ARM.
96      In reply, the Portuguese Republic stated inter alia, in its letter of 30 April 2013, that it agreed to make aid paid to holding companies subject to the application of the ceilings provided for by the legislation at issue, those ceilings being set according to the number of jobs held by a beneficiary each tax year (see paragraph 6 above).
97      In the light of that undertaking given by the Portuguese Republic, which is an indivisible part of the notified aid scheme and must be taken into account in determining the scope of the 2013 decision, the Commission did not make an error of legal classification by refusing to treat aid paid to holding companies under Regime III, as authorised in 2013, without complying with the condition relating to the creation or maintenance of jobs in the ARM, as ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation 2015/1589.
98      It follows from all of the foregoing that the second plea in law must be rejected as unfounded.
The third plea in law, alleging a breach of the principles of protection of legitimate expectations and legal certainty
99      The applicants assert, in essence, that the contested decision infringes the principles of protection of legitimate expectations and legal certainty in that the Commission implicitly authorised the derogation applying to holding companies in so far as it is included in the draft decree-law that formed the legal basis for Regime III as notified to the Commission in 2006 and is enshrined in the final version of that provision that was published in the Diário da República (Official Journal of the Portuguese Republic).
100    Under those circumstances, by failing to raise doubts or objections regarding that derogation in the 2007 decision, the Commission created the legitimate expectation for holding companies benefiting from Regime III that that derogation was compatible with EU law.
101    The Commission disputes that argument.
The principle of protection of legitimate expectations
102    As regards the general principle of the protection of legitimate expectations, it should be noted that the right to rely on that principle presupposes that precise, unconditional and consistent assurances originating from authorised, reliable sources have been given to the person concerned by the competent authorities of the European Union (see judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 97 and the case-law cited).
103    First of all, it is clear that the fact that assurances might have been given by the Portuguese authorities could not, in any event, give rise to any legitimate expectation for the applicants, since those assurances did not originate in the conduct of the competent EU authorities (see, to that effect, judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 104 and the case-law cited).
104    In addition, in the field of State aid, it is settled case-law that, in view of the mandatory nature of the supervision of State aid by the Commission pursuant to Article 108 TFEU, undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article, and furthermore, an economic operator exercising due care should normally be able to determine whether that procedure has been followed (see judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 98 and the case-law cited).
105    In that regard, the benchmark for the EU Courts’ assessment of whether the alleged expectation is legitimate is a reasonably prudent, discriminating and diligent trader (see judgment of 15 November 2018, Deutsche Telekom v Commission, T‑207/10, EU:T:2018:786, paragraph 69 and the case-law cited).
106    In the present case, the applicants have not shown that, as regards the aid paid in breach of the 2007 and 2013 decisions, which, accordingly, was paid in breach of Article 108(3) TFEU, the Commission gave them precise, unconditional and consistent assurances, in accordance with the applicable rules, such as to give rise to a legitimate expectation on their part, as required by the case-law.
107    As regards the condition relating to the creation or maintenance of jobs in the ARM, it should be recalled that it is a condition to access Regime III and a parameter for calculating the aid amount. Furthermore, the assessment of the proportionality of Regime III in relation to the additional costs for which that scheme was intended to compensate was carried out in the light of that condition.
108    In so far as the 2007 decision did not include any exception under which holding companies are exempted from the condition relating to the creation or maintenance of jobs in order to benefit from Regime III, that decision cannot be considered to have given precise, unconditional and consistent assurances regarding the application of Regime III to holding companies, like the applicants, without them being required to create and maintain jobs in the ARM.
109    As regards the 2013 decision, it is sufficient to note that it expressly mentions an undertaking given by the Portuguese Republic not to give more favourable treatment to holding companies, with the result that the applicants cannot claim any legitimate expectation in benefiting from Regime III without complying with the condition relating to the creation or maintenance of jobs in the ARM.
110    In the light of the above, no breach of the principle of protection of legitimate expectations can be established.
The principle of legal certainty
111    As regards the principle of legal certainty, which differs from the principle of the protection of legitimate expectations (see, to that effect, judgment of 2 February 2023, Spain and Others v Commission, C‑649/20 P, C‑658/20 P and C‑662/20 P, EU:C:2023:60, paragraph 83), that principle requires that EU legislation must be certain and its application foreseeable by those subject to it (judgment of 14 October 2010, Nuova Agricast and Cofra v Commission, C‑67/09 P, EU:C:2010:607, paragraph 77).
112    As far as a possible lack of clarity and foreseeability of the 2007 decision is concerned, the applicants’ argument that the mere presence of the derogation at issue in the legal basis annexed to the 2006 notification is sufficient to consider that the 2007 decision covers that derogation cannot be upheld.
113    It should be noted that both the wording of that decision and the wording of the 2013 decision show that the context of which they form part, as well as the objectives of Regime III, leave no room for doubt as to the interpretation to be given to the condition relating to the creation or maintenance of jobs.
114    In that connection, in the 2007 decision the Commission does not establish the existence of the derogation at issue, in particular because it is clear from the 2006 notification as a whole that the derogation at issue was not duly submitted for its assessment and it cannot therefore be concluded that it was approved. Thus, the failure in the 2007 decision to mention specifically any special treatment for holding companies cannot be interpreted as implicit approval of the derogation at issue.
115    That conclusion is not called into question by the fact that the 2013 decision recalls, in recital 19, the undertaking given by the Portuguese authorities to eliminate any preferential treatment of holding companies. That statement on the undertaking to eliminate preferential treatment for holding companies refers to the implementation of aid and cannot presuppose the existence of prior authorisation to grant such preferential treatment. With regard to the 2007 decision, which does not include any undertaking of that kind, it is clear from that decision as a whole that the Commission had understood that any undertaking wishing to benefit from Regime III had to create or maintain jobs in the ARM, since that obligation was a necessary condition for access to Regime III.
116    In any event, any doubts as to the clarity of the applicable legal arrangements in respect of the derogation at issue could not have been created by the 2007 decision, but rather by the conduct of the Portuguese authorities in applying the relevant provisions of the Tax Incentives Statute, as is evident from paragraphs 86 and 87 above.
117    Accordingly, no breach of the principle of legal certainty can be established and the third plea in law must therefore be rejected as unfounded.
118    In the light of all of the foregoing, the present action must be dismissed in its entirety.
Costs
119    Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
120    Since the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Commission.
On those grounds,
THE GENERAL COURT (Fifth Chamber)
hereby:
1.      Dismisses the action;
2.      Orders Millennium BCP Participações, SGPS, Sociedade Unipessoal, Lda and BCP África, SGPS, Lda to pay the costs.
Svenningsen
Martín y Pérez de Nanclares
Stancu
Delivered in open court in Luxembourg on 6 November 2024.
[Signatures]
Table of contents
*      Language of the case: Portuguese.