Summary:
In the master’s dissertation under the title «Aspects of competition protection in the area of tax law: State aid rules as a limit on fiscal policy implementation» state aids in the form of tax advantages are analyzed as a meeting point between competition law and tax law.
In the introduction a short reference is made to the provisions of the Treaty on the Functioning of the European Union (TFEU) establishing free movement of persons, goods, services and capital, to the most significant directives by which the harmonization of member states’ legislation in the field of direct taxation has been implemented and to article 107 par. 1 of the TFEU which declares incompatible with the internal market any aid granted by a Member State and distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between Member States.
In the second chapter the backbone of general state aid rules is presented and, in particular, the exemptions from the general prohibition of article 107 par. 2 and 3 TFEU, the procedural rules of article 108 which are further specified by Council’s Regulation 1589/2015, the De Minimis Regulation which applies to state aids that do not exceed certain amounts and, for this reason, do not need to be notified to the European Commission and the General Exemption Regulation, by which fourteen categories of aid are exempted from the notification procedure.
In the third chapter the implementation of the provision of article 107 par. 1 of the TFEU on state aids in the form of tax advantages is being analyzed. The Commission’s Notices on the application of the State aid rules to measures relating to direct business taxation and on the notion of State aid were used as basic instruments for this analysis. In the first section of the third chapter the notion of state aid in the form of a tax advantage is being explained and some examples from the relevant case law are given. In the next sections the six conditions for considering a tax measure as a forbidden state aid according to article 107 par. 1 of the TFEU are being analyzed and, in particular, the condition of the existence of an undertaking, the condition of attributing the measure under review to the Member State and financing it by state funds, the condition of providing an advantage, the condition of the selectivity of the measure, the condition of the distortion or the threat to distort competition and, finally, the condition of the effect on trade between Member States. In the context of the above analysis, the selectivity criterion and the broadness of its interpretation by the European Commission and the courts of the European Union when reviewing state aid measures in the form of tax advantages are highlighted.
In the conclusion of the essay the uniqueness of controlling tax measures with the use of state aid rules due to the Member States sovereignty in the field of direct taxation is stressed out and some basic conclusions based on the preceding analysis are drawn.
