World Duty Free Group, SA, anciennement Autogrill España, SA v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:793
• Docket Number: C-51/19
• Date: 06 October 2021
• Celex Number: 62019CJ0051
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Grand Chamber)

6 October 2021 (*)

(Appeal – State aid – Article 107(1) TFEU – Tax system – Corporate tax provisions allowing undertakings which are tax resident in Spain to amortise the goodwill resulting from the acquisition of shareholdings in companies which are tax resident outside that Member State – Concept of ‘State aid’ – Condition relating to selectivity – Reference system – Derogation – Difference in treatment – Justification for the difference in treatment)

In Joined Cases C‑51/19 P and C‑64/19 P,

TWO APPEALS under Article 56 of the Statute of the Court of Justice of the European Union, brought on 25 and 29 January 2019 respectively,

World Duty Free Group SA, formerly Autogrill España SA, established in Madrid (Spain), represented by J.L. Buendía Sierra, E. Abad Valdenebro, R. Calvo Salinero and A. Lamadrid de Pablo, abogados (C‑51/19 P),

Kingdom of Spain, represented initially by A. Rubio González and A. Sampol Pucurull, and subsequently by S. Centeno Huerta and S. Jiménez García, acting as Agents (C‑64/19 P),

appellants,

the other parties to the proceedings being:

European Commission, represented by R. Lyal, B. Stromsky, C. Urraca Caviedes and P. Němečková, acting as Agents,

defendant at first instance,

Federal Republic of Germany, represented by J. Möller and R. Kanitz, acting as Agents,

Ireland,

interveners at first instance,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, A. Arabadjiev, M. Vilaras, E. Regan, M. Ilešič, A. Kumin and N. Wahl (Rapporteur), Presidents of Chambers, D. Šváby, S. Rodin, F. Biltgen, K. Jürimäe, C. Lycourgos, P.G. Xuereb and I. Jarukaitis, Judges,

Advocate General: G. Pitruzzella,

Registrar: L. Carrasco Marco, administrator,

having regard to the written procedure and further to the hearing on 7 September 2020,

after hearing the Opinion of the Advocate General at the sitting on 21 January 2021,

gives the following

Judgment

1 By its appeal in Case C‑51/19 P, World Duty Free Group SA (‘WDFG’) asks the Court of Justice to set aside the judgment of the General Court of the European Union of 15 November 2018, World Duty Free Group v Commission (T‑219/10 RENV, ‘the judgment under appeal’, EU:T:2018:784), by which the General Court dismissed WDFG’s action for annulment of Article 1(1) and, in the alternative, of Article 4 of Commission Decision 2011/5/EC of 28 October 2009 on the tax amortisation of financial goodwill for foreign shareholding acquisitions C 45/07 (ex NN 51/07, ex CP 9/07) implemented by Spain (OJ 2011 L 7, p. 48, ‘the decision at issue’).

2 By its appeal in Case C‑64/19 P, the Kingdom of Spain claims that the same judgment should be set aside.

I. Background to the dispute

3 The background to the dispute, which was set out by the General Court in paragraphs 1 to 11 of the judgment under appeal, may be summarised as follows.

4 On 10 October 2007, after a number of written questions had been sent to it in 2005 and 2006 by Members of the European Parliament and after a private operator had submitted a complaint to it in 2007, the European Commission decided to initiate the formal investigation procedure, under Article 108(2) TFEU; that procedure concerned the arrangement provided for in Article 12(5) of the Ley del Impuesto sobre Sociedades (‘the Corporate Tax Law’) as inserted by Ley 24/2001, de Medidas Fiscales, Administrativas y del Orden Social (Law No 24/2001 on fiscal, administrative and social measures), of 27 December 2001 (BOE No 313 of 31 December 2001, p. 50493), and reproduced in Real Decreto Legislativo 4/2004, por el que se aprueba el texto refundido de la Ley del Impuesto sobre Sociedades (Royal Legislative Decree 4/2004 approving the recast text of the Corporate Tax Law), of 5 March 2004 (BOE No 61 of 11 March 2004, p. 10951, ‘the measure at issue’).

5 The measure at issue provides that should an undertaking which is taxable in Spain acquire a shareholding in a ‘foreign company’, where that shareholding acquisition is at least 5% and the shareholding at issue is held without interruption for at least one year, the financial goodwill resulting from that shareholding may be deducted, in the form of an amortisation, from the basis of assessment for the corporate tax for which the undertaking is liable. The measure at issue specifies that, in order to be classified as a ‘foreign company’, a company must be subject to an identical tax to the tax applicable in Spain and its income must derive mainly from business activities carried out abroad.

6 On 28 October 2009, the Commission adopted the decision at issue, by which it closed the formal investigation procedure, as regards shareholding acquisitions within the European Union.

7 By that decision, the Commission declared that the measure at issue, which constitutes a tax advantage enabling Spanish companies to amortise the goodwill resulting from the acquisition of shareholdings in non-resident companies, was incompatible with the internal market where it applied to the acquisition of shareholdings in companies established within the European Union (Article 1(1) of the decision at issue) and ordered the Kingdom of Spain to recover the aid corresponding to the tax reductions granted on the basis of that scheme (Article 4 of that decision).

8 However, the Commission kept the procedure open as regards shareholding acquisitions outside the European Union, with the Spanish authorities having given an undertaking that they would provide additional details concerning the obstacles to cross-border mergers outside the European Union which they had mentioned.

9 On 12 January 2011, the Commission adopted Decision 2011/282/EU on the tax amortisation of financial goodwill for foreign shareholding acquisitions No C 45/07 (ex NN 51/07, ex CP 9/07) implemented by Spain (OJ 2011 L 135, p. 1), which also declared the measure at issue to be incompatible with the internal market where it applies to the acquisition of shareholdings in undertakings established outside the European Union.

II. The procedure before the General Court and the judgment under appeal

10 By application lodged at the General Court Registry on 14 May 2010, WDFG brought an action for annulment of Article 1(1) and, in the alternative, of Article 4 of the decision at issue.

11 By judgment of 7 November 2014, Autogrill España v Commission (T‑219/10, EU:T:2014:939), the General Court upheld the action on the ground that the Commission had incorrectly applied the condition relating to selectivity laid down in Article 107(1) TFEU. The General Court also annulled Decision 2011/282 by its judgment of 7 November 2014, Banco Santander and Santusa v Commission (T‑399/11, EU:T:2014:938).

12 By application lodged at the Registry of the Court of Justice on 19 January 2015, the Commission brought an appeal against the judgment of 7 November 2014, Autogrill España v Commission (T‑219/10, EU:T:2014:939). That appeal, which was registered under number C‑20/15 P, was joined to the appeal registered under number C‑21/15 P, which the Commission had brought against the judgment of 7 November 2014, Banco Santander and Santusa v Commission (T‑399/11, EU:T:2014:938).

13 WDFG, supported by the Federal Republic of Germany, Ireland and the Kingdom of Spain, contended that the appeal should be dismissed.

14 By judgment of 21 December 2016, Commission v World Duty Free Group and Others (C‑20/15 P and C‑21/15 P, ‘the judgment in WDFG’, EU:C:2016:981), the Court of Justice set aside the judgments of 7 November 2014, Autogrill España v Commission (T‑219/10, EU:T:2014:939), and of 7 November 2014, Banco Santander and Santusa v Commission (T‑399/11, EU:T:2014:938), referred the cases back to the General Court, reserved the costs in part and ordered the Federal Republic of Germany, Ireland and the Kingdom of Spain to bear their own costs.

15 By decision of the President of the Ninth Chamber, Extended Composition, of the General Court of 8 December 2017, after the parties had been heard, Case T‑219/10 RENV, World Duty Free Group v Commission, and Case T‑399/11 RENV, Banco Santander and Santusa v Commission, were joined for the purposes of the oral part of the procedure, in accordance with Article 68 of the Rules of Procedure of the General Court.

16 By the judgment under appeal, the General Court dismissed the action brought by WDFG.

17 In rejecting WDFG’s three pleas in law, alleging, first, that the measure at issue was not selective (paragraphs 32 to 228 of the judgment under appeal), secondly, that there had been an error in determining the beneficiary of the measure at issue (paragraphs 229 to 250 of the judgment under appeal) and, thirdly, that the principle of the protection of legitimate expectations had been infringed (paragraphs 251 to 327 of the judgment under appeal), the General Court held that the action had to be dismissed in its entirety, and that there was no need to rule on its admissibility, which had however been challenged by the Commission (paragraphs 30 and 329 of the judgment under appeal).

18 As regards, more specifically, the first plea in law, the General Court pointed out, in the first place, that, as is apparent from the judgment in WDFG, a tax measure which grants an advantage upon satisfaction of the condition that an economic transaction is performed, may be selective including where, having regard to the characteristics of the transaction concerned, any undertaking may freely choose whether to perform that transaction (paragraphs 77 to 89 of the judgment under appeal).

19 In the second place, the General Court examined the measure at issue in the light of the three stages of the method of analysing the selectivity of a national tax measure, set out in paragraphs 63 and 64 of the judgment under appeal, that is to say: first of all, the identification of the common or ‘normal’ tax regime applicable in the Member State concerned...