Action brought on 10 November 2011 - Cheverny Investments v Commission

(Case T-585/11)

Language of the case: German

Parties

Applicant: Cheverny Investments (St Julians, Republic of Malta) (represented by: H. Prinz zu Hohenlohe-Langenburg, lawyer)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

annul Commission Decision K(2011)275 of 26 January 2011 on State aid C-7/10 relating to the fiscal carry-forward of losses ('Sanierungsklausel'), addressed to the Federal Republic of Germany;

alternatively, annul Commission Decision K(2011)275 of 26 January 2011 on State aid C-7/10 addressed to the Federal Republic of Germany inasmuch as on interpretation of national law the carry-forward of losses under Paragraph 8c(1a) of the Law on corporation tax (Körperschaftssteuergesetz, 'KStG') does not apply only to companies which are over-indebted or insolvent or are likely to become insolvent, but a carry-forward of losses within the meaning of Paragraph 8c(1a) leads, in so far as the further conditions are met, to a retention of the carry-forward of losses in the event of a change of share owner also for companies whose insolvency or over-indebtedness is avoidable, thus merely imminent ;

order the Commission to pay the applicant's necessary costs under Article 87(2)(1) of the Rules of Procedure.

Pleas in law and main arguments

In support of the action, the applicant claims that the Commission made an error of assessment by incorrectly finding in its analysis of Paragraph 8c(1a) of the KStG that the carry-forward of losses constituted State aid, in that it

assumed that the provision which it objected to concerns only companies which are insolvent or likely to become insolvent, but not also those for which insolvency or over-indebtedness are merely imminent;

assumed selectivity on the basis that the reference system used is Paragraph 8c of the KStG and not the Law on corporation tax.

In addition, the applicant claims that the Commission made errors of assessment in the contested decision, in that

the Commission did not determine the reference system in the light of the KStG and taking account of its own Notice on the application of the State aid rules to measures relating to direct business taxation (OJ 1998 L 384, p.3) and its proposal for a Council Directive on a common consolidated corporate tax base (CCCTB);

did not find that the carry-forward of losses was justified by the disruption to the general economic equilibrium of 2009.

In the applicant's opinion, in the light of the foregoing, the Commission infringed Article 107(1) TFEU.

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