Action brought on 2 December 2011 - Treofan Holdings and Treofan Germany v Commission

(Case T-612/11)

Language of the case: German

Parties

Applicants: Treofan Holdings GmbH (Raunheim, Germany) and Treofan Germany GmbH & Co. KG (represented by: J. de Weerth, lawyer)

Defendant: European Commission

Form of order sought

The applicants claim that the Court should:

annul the decision of the European Commission of 26 January 2011, C(2011) 275, as corrected by C(2011) 2608, in the procedure on State aid C 7/2010 (ex CP 250/2009 and NN 5/2010) implemented by Germany 'KStG, Sanierungsklausel' ('Law on corporation tax, provision enabling the fiscal carry forward of losses to allow for the restructuring of companies in difficulty');

order the defendant to pay the costs.

Pleas in law and main arguments

In support of the action, the applicant relies in essence on the following pleas in law:

First plea in law, alleging infringement of Article 107(1) TFEU: the deduction of losses is not an aid granted through State resources

With regard to this plea, the applicants submit inter alia, that the provision enabling the fiscal carry forward of losses to allow for the restructuring of companies in difficulty does not confer a financial advantage, but rather maintains a company's already existing financial position in the form of the carry forward of losses. The applicants therefore take the view that there is no financing through State resources.

Second plea in law, alleging infringement of Article 107(1) TFEU: Absence of selectivity in the absence of an exception to the relevant reference system

The applicants submit in that regard that the relevant reference system is the general rules on the deduction of losses for corporations (Paragraph 10d of the German Law on Income Tax in conjunction with Paragraph 8(1) of the KStG and Paragraph 10a of the German Law on Trade Tax) and that the limitation by Paragraph 8c of the KStG is merely an exception to that relevant reference system, which is in turn limited inter alia by the provision enabling the fiscal carry forward of losses as a partial exception to that exception.

Third plea in law, alleging infringement of Article 107(1) TFEU: Absence of selectivity as there is no differentiation between economic operators who are in a comparable factual and legal position as regards the objective pursued

The applicants submit in this connection inter alia that the provision enabling the fiscal carry forward of losses benefits all taxable undertakings and does not favour either particular areas of business and sectors or undertakings of a particular size.

Fourth plea in law, alleging infringement of Article 107(1) TFEU: Absence of selectivity due to justification on the basis of the nature and general scheme of the tax system

The applicants submit in that regard that the provision enabling the fiscal carry forward of losses is based on tax system specific reasons which comply with principles of constitutional law, such as taxation according to ability to pay, the prevention of excessive taxation and respect for the principle of proportionality.

Fifth plea in law, alleging infringement of Article 107(1) TFEU: Manifest errors of assessment on the basis of insufficient consideration of the position under German tax law

The applicants submit in that regard that the Commission failed to have regard to the provisions of German tax law on deduction of losses.

Sixth plea in law, alleging that there is a legitimate expectation under EU law

The applicants submit in this connection inter alia that the tax privileges in question upon acquisitions of interests together with deductions of losses were raised by the Commission for the first time in a formal investigation procedure and that this is an extraordinary situation, which is not discernible to the legislature, tax courts and the tax authorities and therefore is also not discernible to undertakings even if they have been thoroughly and competently advised.

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