Opinion of Advocate General Rantos delivered on 13 March 2025.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2025:186
• Date: 13 March 2025

Provisional text

OPINION OF ADVOCATE GENERAL

RANTOS

delivered on 13 March 2025 (1)

Case C‑653/23

SIA „TOODE”

v

Valsts ieņēmumu dienests

(Request for a preliminary ruling from the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia))

( Reference for a preliminary ruling – State aid – Article 107(1) TFEU – National aid scheme approved by the European Commission to support the economy in the context of the COVID-19 pandemic – Refusal by the competent authority to grant aid to an undertaking that does not fulfil the conditions laid down by that scheme – Action requesting that a national court order the granting of such aid – Expiry during the legal proceedings of the time limit fixed for the granting of such aid – Determination of the date on which the aid is deemed to have been granted – Regulation (EU) 2015/1589 – Article 1 – Existing aid or new aid )

I. Introduction

1. The Latvian tax authorities refused a request from a Latvian undertaking for State aid intended to support the economy in the context of the COVID-19 pandemic, on the grounds that it did not meet the conditions laid down by national law for eligibility. That undertaking brought an action before a national court to obtain a declaration that it did indeed fulfil those conditions and to order the tax authorities to adopt a beneficial administrative act in its case. However, the period of validity of the aid scheme approved by the European Commission expired during the proceedings before the national court. Can this undertaking be granted the aid in question if the initial refusal by the tax authorities to grant the aid is overturned by a court decision delivered after the time limit for granting the aid has expired? This is, in essence, the question being asked by the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia).

2. The present case will require the Court to rule, first, on the determination of the date on which State aid is deemed to have been granted under Article 107(1) TFEU and, second, on whether aid should be classified as existing or new within the meaning of Article 1 of Regulation (EU) 2015/1589, (2) in the specific context where a national court recognises eligibility for aid after the time limit fixed for granting that aid has expired, as laid down in national legislation and approved by the Commission, and orders the competent authority to grant the aid requested.

II. Legal context

A. European Union law

1. Regulation (EU) 2015/1589

3. Article 1 of Regulation (EU) 2015/1589, entitled ‘Definitions’, reads:

‘For the purposes of this Regulation, the following definitions shall apply:

…

(b) “existing aid” means:

…

(ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

…

(c) “new aid” means all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

…’

2. The communication on the Temporary Framework

4. The communication from the Commission entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’ (OJ 2020 C 91 I, p. 1, ‘the communication on the Temporary Framework’), of 20 March 2020, has been amended a number of times. This communication includes a section 3.1., entitled ‘Limited amounts of aid’, points 21 and 22 of which – in their version resulting from its sixth amendment of 24 November 2021 (OJ 2021 C 473, p. 1) – were worded as follows:

‘21. Beyond the existing possibilities based on Article 107(3)(c) TFEU, temporary limited amounts of aid to undertakings that find themselves facing a sudden shortage or even unavailability of liquidity can be an appropriate, necessary and targeted solution during the current circumstances.

22. The Commission will consider such State aid compatible with the internal market on the basis of Article 107(3)(b) TFEU, provided that all the following conditions are met …:

…

(d) the aid is granted no later than 31 December 2020;

…’

B. Latvian law

1. Law on Administrative Proceedings

5. Article 250(2) of the Administratīvā procesa likums (Law on Administrative Proceedings) of 25 October 2001, (3) in the version applicable to the dispute in the main proceedings, provides:

‘When assessing the lawfulness of an administrative act, the courts shall take into account in their decision only the reasoning contained in the administrative act. This limitation shall not apply in cases where the application seeks the granting of a beneficial administrative act.’

6. Article 254(1) of that law provides:

‘If a court considers the application for the adoption of an administrative act to be well founded, it shall order the public authority to adopt the corresponding administrative act.’

2. The Latvian aid rules

7. Decree No 676 of the Council of Ministers of 10 November 2020 (4) established the ‘Noteikumi par atbalstu Covid-19 krīzes skartajiem uzņēmumiem apgrozāmo līdzekļu plūsmas nodrošināšanai’ (rules on aid to undertakings affected by the COVID-19 crisis to ensure the flow of working capital; ‘the Latvian aid rules’). This aid scheme, which came into force on 17 November 2020, was established in accordance with the requirements set out in section 3.1 of the communication on the Temporary Framework and was approved by the Commission by decision SA.59592 (2020/N) of 16 December 2022, for a period up to 30 November 2021, which was subsequently extended to 30 June 2022. (5)

8. Paragraph 23 of the Latvian aid rules, in the version in force at the time of the facts of the dispute in the main proceedings, stated as follows:

‘The moment of granting the aid is deemed to be the day on which [the National Tax Authority] takes a decision regarding the granting of the aid.’

9. Paragraph 24 of these rules stated:

‘The decision is taken by 30 June 2022, in accordance with [the communication on] the Temporary Framework.’

III. The dispute in the main proceedings, the questions referred and the procedure before the Court

10. On 25 March and 9 April 2021, SIA TOODE (‘TOODE’), a Latvian undertaking, applied to the Valsts ieņēmumu dienests (National Tax Authority, Latvia; ‘the VID’ or ‘the tax authority’) for aid, for the months of January and February 2021, under the national aid scheme intended to ensure the flow of working capital for undertakings affected by the COVID-19 crisis (‘the national aid scheme’).

11. By decisions of 23 April and 7 June 2021, and then of 9 June and 23 July 2021, the VID refused to grant TOODE the aid requested on the grounds that this undertaking did not meet the conditions laid down by the Latvian aid rules. In that regard, the VID determined that TOODE’s turnover for the months of January and February 2021 had not decreased sufficiently to meet the conditions required by the national legislation and thus be eligible for that aid.

12. TOODE brought an action before the Administratīvā rajona tiesa (District Administrative Court, Latvia) arguing in particular that the VID had no reason to take into account the total value of the transactions indicated in the value added tax (VAT) return for the tax year in question when calculating its turnover. By judgment of 14 April 2022, that court dismissed TOODE’s action on the grounds that the conditions for granting the aid were not met in this case.

13. On 29 June 2022, TOODE brought an appeal against that judgment before the Administratīvā apgabaltiesa (Regional Administrative Court), the referring court. That appeal is intended to obtain a beneficial administrative act in accordance with Article 254(1) of the Latvian Law on Administrative Proceedings.

14. The referring court notes that the national aid scheme was approved by the Commission and should be considered compatible with the internal market, provided, in particular, that the aid was granted – in accordance with point 22(d) of the communication on the Temporary Framework and paragraph 24 of the Latvian Aid Rules – by 30 June 2022 at the latest. That court also emphasises the point that, in the present case, that time limit expired during the proceedings initiated before it. The court considers that it is required to assess, in the context of the main dispute, whether TOODE is still eligible for the aid requested. For this purpose, it is required to determine the date on which that aid is deemed to have been ‘granted’ pursuant to Article 107(1) TFEU, and whether the aid constitutes existing or new State aid within the meaning of Article 1 of Regulation (EU) 2015/1589.

15. First of all, with regard to the date on which the aid is deemed to have been granted, that court considers that a certain and unconditional right to receive the aid within the meaning of the Court’s case-law (6) can, in principle, only arise following a court decision, that is to say, when the national court finds that the applicant has fulfilled all the conditions laid down by national law to be eligible for the aid in question and that the refusal by the competent authority to grant the aid is unlawful and unfounded. Furthermore, in so far as the legal relationship does not exist, the enforcement of a court decision cannot give rise to the retroactive adoption (ex tunc) of a beneficial administrative act, as the national court can only order the competent authority to adopt an appropriate administrative act granting aid ex nunc.

16. At the request of the Court, that court stated that TOODE did indeed fulfil the conditions laid down by national law to be eligible for the aid at the time it submitted its application, such that the VID’s refusal appears to be unlawful and unfounded. Therefore, that court is wondering if, in the event that it orders the VID to adopt a beneficial administrative act and to grant and pay the amount of the aid requested, it should be considered that the date on which that aid was granted corresponds to the date on which the tax authorities...