Case C‑6/12

P Oy

(Request for a preliminary ruling from the Korkein hallinto-oikeus)

(State aid — Articles 107 and 108 TFEU — Condition of ‘selectivity’ — Regulation (EC) No 659/1999 — Article 1(b)(i) — Existing aid — National legislation concerning corporate income tax — Deductibility of losses sustained — Non-deductibility in the case of change of ownership — Authorisation of derogations — Degree of latitude of the tax authorities)

Summary — Judgment of the Court (Fifth Chamber), 18 July 2013

1.        State aid — Concept — Grant by the public authorities of favourable tax treatment to certain undertakings  — Included — Advantages resulting from a general measure applicable without distinction to all economic operators  — Not included

(Art. 107(1) TFEU)

2.        State aid — Concept — Selective nature of the measure — National legislation under which, pursuant to authorisation, losses sustained by certain companies during the course of a tax year may be deducted from profits made in later tax years — Justification based on the nature or scheme of the system — Criteria for assessment

(Art. 107(1) TFEU)

3.        State aid — Existing aid and new aid — Examination by the Commission — Exclusive competence — Jurisdiction of the national courts — Limits

(Arts 107 TFEU and 108 TFEU; Council Regulation No 659/1999, Art. 1(b)(i))

4.        State aid — Existing aid — Examination by the Commission with Member States — Legal status in the absence of a finding of incompatibility with the internal market made by the Commission — Jurisdiction of the national courts to prohibit existing aid — Absence

(Art. 108(1) and (3), TFEU)

5.        State aid — Existing aid and new aid — Concept — Measures altering existing aid  — Inclusion in the concept of new aid — Application of the notification procedure

(Art. 108(3) TFEU; Council Regulation No 659/1999, Art. 1(b)(i))

1.        See the text of the decision.

(see para. 18)

2.        A general tax regime which provides that losses sustained by a company during the course of a tax year may be carried forward and deducted from profits made in later tax years, that losses cannot be carried forward after a change of ownership and that, in some cases, the competent authorities may not authorise derogation from that prohibition, may satisfy the condition of selectivity as an element of the concept of State aid within the meaning of Article 107(1) TFEU if it were to be established that the reference system, namely the normal system, consists in a prohibition on the deduction of losses in the case of a change of ownership, in relation to which the authorisation procedure would constitute an exception. Such a regime may be justified by the nature or general scheme of the system of which it forms part, but justification is not possible if the competent national authorities, so far as concerns authorisation to derogate from the prohibition on the deduction of losses, have a discretion which empowers them to base authorisation decisions on criteria unrelated to that tax regime.

A measure which constitutes an exception to the application of the general tax system may be justified if the Member State concerned can show that that measure results directly from the basic or guiding principles of its tax system. Such justification is possible if, under the authorisation procedure, the degree of latitude of the competent authorities is limited to verifying the conditions laid down in order to pursue an identifiable tax objective and the criteria to be applied by those authorities are inherent in the nature of the tax regime. On the other hand, if the competent authorities have a broad discretion to determine the beneficiaries or the conditions under which the financial assistance is provided on the basis of criteria unrelated to the tax system, such as maintaining employment, the exercise of that discretion must then be regarded as favouring certain undertakings or the production of certain goods in comparison with others which, in the light of the objective pursued, are in a comparable factual and legal situation. In this context, the application of a regional development or social cohesion policy cannot in itself enable a measure adopted within the framework of that policy to be regarded as justified by the nature and general scheme of a national tax system.

(see paras 22, 24, 26, 27, 29, 32, operative part 1)

3.        See the text of the decision.

(see paras 36-39)

4.        Article 108(3) TFEU does not preclude a tax regime under which losses sustained by a company during the course of a tax year may be carried forward and deducted from profits made in later tax years, if that regime should be classified as State aid, from continuing to be applied in the Member State which established it because it grants existing aid, without prejudice to the competence of the Commission under that article.

Article 108(1) TFEU gives the Commission the power, in cooperation with the Member States, to keep existing aid under constant review. That review may prompt the Commission to propose to the Member State concerned the appropriate measures required by the progressive development or by the functioning of the common market and, if necessary, to decide to abolish or alter aid which it considers to be incompatible with the common market.

That aid must be regarded as lawful so long as the Commission has not found that it is incompatible with the internal market. Accordingly, in such circumstances Article 108(3) TFEU does not give national courts the power to prohibit existing aid from being put into effect.

(see paras 40, 41, 48, operative part 2)

5.        See the text of the decision.

(see paras 42, 45-47)