P Oy.
Date: 2013-07-18
8. In order to clarify the provision laid down in the third subparagraph of Paragraph 122 of the TVL and to harmonise administrative practices, the Tax Directorate of Finland issued, on 14 February 1996, guidance letter No 634/348/96, the relevant provisions of which are as follows:
‘(2) Authorisation procedure for derogation
2.1 Conditions of authorisation
Under Paragraph 122 of the TVL, a [company] may, on application, where necessary for the continuation of its activities, be granted authorisation to deduct established losses.
The following may, inter alia, be considered to be special reasons:
– transfers from one generation to another;
– the sale of an undertaking to its employees;
– the purchase of a new undertaking not yet active;
– changes of ownership within a group of companies;
– changes of ownership related to a rescue programme;
– particular impact on employment; and
– changes in ownership of listed companies.
2.1.1. Special conditions
The purpose of Paragraph 122 of the TVL is to prevent loss-making companies from being converted into a commodity. If an undertaking’s change of ownership does not have the characteristics described, the authorisation for loss deduction may be granted.
…
2.1.2 Continuation of activities
Authorisation for loss deduction may be granted where deduction is necessary for a [company] to continue its activities. An absolute condition may be that the [company] continues its activities after the change in ownership. If, in practice, the [company] has ceased activities and its value is essentially based on the established losses, authorisation to derogate should not be granted.’
17. It should be noted at the outset that Article 107(1) TFEU prohibits, in principle, aid ‘favouring certain undertakings or the production of certain goods’, that is to say selective aid.
18. Thus, a measure by which the public authorities grant certain undertakings favourable tax treatment which, although not involving the transfer of State resources, places the recipients in a more favourable financial position than other taxpayers amounts to State aid within the meaning of Article 107(1) TFEU. On the other hand, advantages resulting from a general measure applicable without distinction to all economic operators do not constitute State aid within the meaning of Article 107 TFEU (Joined Cases C‑106/09 P and C‑107/09 P Commission and Spain  v Government of Gibraltar and United Kingdom  [2011] ECR I‑0000, paragraphs 72 and 73 and the case-law cited).
19. The Court has held that in order to classify a domestic tax measure as ‘selective’, it is necessary to begin by identifying and examining the common or ‘normal’ tax regime applicable in the Member State concerned. It is in relation to this common or ‘normal’ tax regime that it is necessary, secondly, to assess and determine whether any advantage granted by the tax measure at issue may be selective by demonstrating that the measure derogates from that common regime inasmuch as it differentiates between economic operators who, in light of the objective assigned to the tax system of the Member State concerned, are in a comparable factual and legal situation (see Joined Cases C‑78/08 to C‑80/08 Paint Graphos and Others  [2011] ECR I‑7611, paragraph 49 and the case-law cited).
22. According to the case-law of the Court, a measure which, although conferring an advantage on its recipient, is justified by the nature or general scheme of the system of which it is part does not fulfil the condition of selectivity (Case C‑143/99 Adria-Wien Pipeline and Wietersdorfer & Peggauer Zementwerke  [2001] ECR I‑8365, paragraph 42 and the case-law cited). Thus, a measure which constitutes an exception to the application of the general tax system may be justified if the Member State concerned can show that that measure results directly from the basic or guiding principles of its tax system (see Paint Graphos and Others , paragraph 65 and the case-law cited).
25. So far as concerns the power of the competent authorities, it has been established by the Court’s case-law that discretion which enables those authorities to determine the beneficiaries or the conditions under which the financial assistance is provided cannot be considered to be general in nature (see, to that effect, Case C‑256/97 DM Transport  [1999] ECR I‑3913, paragraph 27 and the case-law cited).
26. Thus, the application of an authorisation system which enables losses to be carried forward to later tax years, such as that in question in the present case, cannot, in principle, be considered to be selective if the competent authorities have, when deciding on an application for authorisation, only a degree of latitude limited by objective criteria which are not unrelated to the tax system established by the legislation in question, such as the objective of avoiding trade in losses.
27. On the other hand, if the competent authorities have a broad discretion to determine the beneficiaries or the conditions under which the financial assistance is provided on the basis of criteria unrelated to the tax system, such as maintaining employment, the exercise of that discretion must then be regarded as favouring ‘certain undertakings or the production of certain goods’ in comparison with others which, in the light of the objective pursued, are in a comparable factual and legal situation (see, to that effect, Commission and Spain  v Government of Gibraltar and United Kingdom , paragraph 75).
29. In this context, it should be borne in mind that the Court has held that the application of a regional development or social cohesion policy cannot in itself enable a measure adopted within the framework of that policy to be regarded as justified by the nature and general scheme of a national tax system (see, to that effect, Case C‑88/03 Portugal  v Commission  [2006] ECR I‑7115, paragraph 82).
36. Article 108 TFEU establishes different procedures according to whether the aid is existing or new. Whilst under Article 108(3) TFEU new aid must be notified to the Commission and may not be implemented until that procedure has led to a final decision, under Article 108(1) TFEU existing aid may be lawfully implemented so long as the Commission has made no finding of incompatibility (Case C‑262/11 Kremikovtzi  [2012] ECR I‑0000, paragraph 49 and the case-law cited).
37. Under that system of supervision, the Commission and the national courts have different powers and responsibilities (Case C‑44/93 Namur‑Les assurances du crédit  [1994] ECR I‑3829, paragraph 14).
38. Proceedings may be commenced before national courts requiring those courts to interpret and apply the concept of aid contained in Article 107(1) TFEU, in particular in order to determine whether State aid introduced without observance of the preliminary examination procedure provided for in Article 108(3) TFEU ought to have been subject to this procedure. On the other hand, national courts do not have jurisdiction to give a decision on whether State aid is compatible with the internal market (Case C‑119/05 Lucchini  [2007] ECR I‑6199, paragraphs 50 and 51 and the case-law cited).
39. Whilst the Commission must examine the compatibility of the proposed aid with the internal market, even where the Member State has acted in breach of the prohibition on giving effect to aid contained in the final sentence of Article 108(3) TFEU, national courts, in such a situation, do no more than preserve, until the final decision of the Commission, the rights of individuals faced with a possible breach by State authorities of that prohibition (see, to that effect, Case C‑199/06 CELF and Ministre de la Culture et de la Communication  [2008] ECR I‑469, paragraph 38 and the case-law cited).
41. That aid must be regarded as lawful so long as the Commission has not found that it is incompatible with the internal market (Case C‑322/09 P NDSHT  v Commission  [2010] ECR I‑11911, paragraph 52 and the case‑law cited). Accordingly, in such circumstances Article 108(3) TFEU does not give national courts the power to prohibit existing aid from being put into effect.
42. According to Article 1(b)(i) of Regulation No 659/1999, without prejudice to Articles 144 and 172 of the Act of Accession, ‘existing aid’ means all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty.