Case T-492/19: Action brought on 5 July 2019 — GlaxoSmithKline Finance and Setfirst v Commission
Date: 2019-07-05
Institutions: General Court
Subjects: State aid, United Kingdom, control of State aid, corporation tax, foreign enterprise, group of companies, parent company, right of establishment, tax avoidance, tax exemption








C_2019312EN.01003301.xml










16.9.2019   


EN


Official Journal of the European Union


C 312/33






Action brought on 5 July 2019 — GlaxoSmithKline Finance and Setfirst v Commission
(Case T-492/19)
(2019/C 312/28)
Language of the case: English

Parties


Applicants: GlaxoSmithKline Finance plc (Brentford, United Kingdom) and Setfirst Ltd (Brentford) (represented by: K. Bacon QC, and A. Lyle-Smythe, lawyer)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should:






—


annul Commission Decision C(2019) 2526 final of 2 April 2019 on the State Aid SA.44896 implemented by the United Kingdom concerning the Controlled Foreign Company (CFC) Group Financing Exemption in its entirety;










—


in the alternative, annul the contested decision insofar as it does or may relate to CFCs actually established and carrying on genuine economic activities in another Member State;










—


in the alternative, annul the contested decision insofar as it fails to provide sufficient information for the recipient to calculate the precise amount of aid to be recovered without overmuch difficulty;










—


in the alternative, grant such partial annulment as the General Court deems appropriate; and










—


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





Pleas in law and main arguments

In support of the action, the applicants rely on four pleas in law.






1.


First plea in law, alleging that the Commission has erred in law and provided insufficient reasoning in finding that the group financing exemption (GFE) constitutes an advantage as, for CFCs which are genuinely established in another Member State, the effect of the Cadbury Schweppes case (1) is that their parent companies should not have been liable to any CFC charge (even a reduced charge levied as a result of the partial GFE).










2.


Second plea in law, alleging that the Commission has erred in law, made a manifest error of assessment and has failed to state adequate reasons in finding that the GFE was not justified on the grounds of ensuring compliance with the freedom of establishment.










3.


Third plea in law, alleging that the Commission has erred in law and made a manifest error of assessment in concluding that the GFE was not a justified derogation based on the need to avoid complex and disproportionately burdensome allocation of profit to significant people functions based on the OECD’s approach to allocating profits to permanent establishments.










4.


Fourth plea in law, alleging that the Commission has erred in law in failing to provide adequate information as to the parameters of recovery.






(1)  Judgment of 12 September 2006 in Cadbury Schweppes and Cadbury Schweppes Overseas v Commissioner of Inland Revenue (Case C-196/04, EU:C:2006:544).