Case T-755/19: Action brought on 6 November 2019 – BBA International Investments v Commission
Date: 2019-11-06
Institutions: General Court
Subjects: State aid, United Kingdom, control of State aid, corporation tax, equal treatment, foreign enterprise, group of companies, tax avoidance, tax exemption, tax law








C_2020027EN.01005401.xml










27.1.2020   


EN


Official Journal of the European Union


C 27/54






Action brought on 6 November 2019 – BBA International Investments v Commission
(Case T-755/19)
(2020/C 27/56)
Language of the case: English

Parties


Applicant: BBA International Investments Sàrl (Luxembourg, Luxembourg) (represented by: N. Niejahr, B. Hoorelbeke, lawyers, A. Stratakis and P. O’Gara, Solicitors)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:






—


annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing (OJ 2019 L 216, p. 1), in so far as it holds that the alleged aid measure constitutes aid in the sense of Article 107(1) TFEU and orders its recovery with interest, including from the applicant;










—


in the alternative, annul Articles 2, 3 and 4 of the contested decision to the extent that it orders the recovery of incompatible aid with interest, including from the applicant;










—


order the Commission to bear its own costs and the applicant’s costs in connection with these proceedings.




Pleas in law and main arguments
In support of the action, the applicant relies on five pleas in law.






1.


First plea in law, alleging that the Commission has violated Article 107(1) TFEU by holding that the alleged aid measure provides a selective advantage:






a)


to the companies making use of the 75 % exemption for low-risk qualifying loan relationships, because the Commission has:






—


wrongly identified the UK CFC regime as the reference system;










—


erred in law by concluding that the 75 % exemption constitutes a derogation from the reference tax system, on the basis that:






(i)


the finding of a derogation is based erroneously on the regulatory technique;










(ii)


the significant people functions test is not the central test for the UK CFC regime; and










(iii)


qualifying and non-qualifying loan relationships are not in the same legal and factual situation and, in any event, erred in law in applying by analogy or placing undue reliance upon the terms of Council Directive (EU) 2016/1164. (1)















—


erred in fact and in law by concluding that the 75 % exemption is not justified by the nature and the overall structure of the tax system in the same way as the Group Financing Exemption that applies to non-trading finance profits falling within Section 371EC of the Taxation (International and Other Provisions) Act 2010.














b)


to the companies making use of the matched interest and qualifying resources exemptions, because it has:






—


wrongly identified the UK CFC rules as the reference system;










—


erred in law by concluding that the matched interest and qualifying resources exemptions constitute a derogation from the reference tax system, on the basis that:






(i)


the finding of a derogation is based erroneously on the regulatory technique and the significant people functions test is not the central test for the UK CFC rules;










(ii)


taxpayers qualifying for the matched interest and qualifying resources exemptions are not in the same legal and factual situation as taxpayers who do not so qualify.














—


erred in fact and in law by concluding that the matched interest and qualifying resources exemptions are not justified by the nature and the overall structure of the tax system.


















2.


Second plea in law, alleging that the Commission has violated Article 107(1) TFEU by failing to demonstrate that the alleged aid measure was liable to affect trade between Member States and threatened to distort competition.










3.


Third plea in law, alleging, alternatively, that the Commission has violated Article 49 TFEU by qualifying the alleged aid measure as incompatible State aid that does not breach the freedom of establishment as guaranteed by Article 49 TFEU.










4.


Fourth plea in law, alleging that the Commission has violated the fundamental principle of equal treatment/non-discrimination by:






—


treating non-trading finance profits derived from qualifying loans in the same way as non-trading finance profits derived from non-qualifying loans; and










—



by treating the Group Financing Exemption differently depending on whether the non-trading finance profits fall within sections 371EB or 371EC of the Taxation (International and Other Provisions) Act 2010.














5.


Fifth plea in law, alleging, in the alternative, that, even if the alleged aid measure falls within the ambit of Article 107(1) TFEU, the Commission has violated Article 16(1) of Council Regulation (EU) 2015/1589, (2) by ordering the recovery of amounts of alleged incompatible aid from the beneficiaries of the alleged aid measure, because such recovery infringes general principles of EU law, namely the principle of legitimate expectations and legal certainty.






(1)  Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ 2016 L 193, p. 1).

(2)  Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9).