ANTITRUST – The ECJ on the tax rulings granted by Luxembourg to the Engie group under European State Aid Law

Newsletter n. 91 – December 2023


The ECJ on the tax rulings granted by Luxembourg to the Engie group under European State Aid Law

On 5 December 2023, the Court of Justice of the European Union (ECJ) issued its judgment in joined cases C-451/21 (Luxembourg v Commission) and C-454/21 (Engie Global LNG Holding and Others v Commission) against the European Commission (EC)’s decision of 20 June 2018 which had stated Luxembourg’s granting of state aid to the Engie Group in connection with tax rulings on intra-group financing transactions. The EC decision had been upheld by the General Court. According to the ECJ, the EC nevertheless erred in determining the reference system constituting the starting point for the comparative examination to be carried out in the assessment of the selectivity of those tax measures and thus of their classification as prohibited State aid. Moreover, the EC was not required to consider the administrative practice of the Luxembourg tax authorities relating to a national provision on abuse of law, as the Luxembourg tax authorities had deviated from their established practice in dealing with transactions similar to the one at issue. Those errors vitiated the whole of the selectivity analysis and the EC’s decision has been therefore annulled.