Distinction between State Aid and General Tax Measures

The application of tax measures may have effects that could bring them within the scope of the State aid provision of Article 107(1) of the Treaty on the Functioning of the European Union (TFEU). However, only selective measures, that is, measures that favour certain undertakings or the production of certain goods, may constitute State aid within the meaning of Article 107(1) TFEU. General measures that benefit all undertakings in a Member State do not qualify as State aid. How wide has the circle of beneficiaries to be in order to escape the State aid notion?

This article will try to shed some light on the question on where the Commission has drawn the line between State aid measures and general measures in the area of taxation. So far, the Commission has only adopted a handful of decisions in which it took the view that the tax measures at stake qualified as general measures and consequently did not constitute State aid. The threshold of convincing the Commission that a certain tax measure qualifies as general measures is very high. However, recent Commission decisions indicate that the Commission might now take a more flexible approach on this issue. These recent Commission decisions are summarized in this article.

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