No state aid. No economic advantage. General Court annuls decision (The Netherlands and Starbucks v Commission)

In 2015, the European Commission found that a tax ruling provided to the Starbucks group by the Netherlands’ tax authorities resulted in State aid. The General Court annulled that decision. When national tax law does not distinguish between stand-alone companies and integrated companies, the Commission may use the at arm’s length principle as a tool to determine whether the fiscal burden of an integrated company is comparable to that of a (stand-alone) undertaking acting under market conditions. In doing so, an advantage can only be determined if the variation between the two goes beyond the inaccuracies inherent to the method used to approximate the market-based outcome. The Court then found that the Commission’s contesting of the choice of the methodology used (the ‘TNMM’) in itself is insufficient to establish an advantage. After a detailed review of the application of that method, the Court found that the Commission did not met its burden of proof with regard to the existence of such an advantage and hence annulled the decision. The Court remarked that the Commission could not be allowed to take account of data gathered that was not available at the time the ruling was issued, pointing out that the Commission had not argued in the decision under review that the ruling should have been amended or revoked after being issued based on the facts and circumstances so established.