The Rubin Vase – pitfalls of differentiated approaches to taxes and levies under EU State Aid Law

The application of European Union State aid law to fiscal measures is notoriously controversial, as the existing interpretative standard seeks a modus vivendi between two ultimately irreconcilable elements: On the one hand, the exclusive national competences in the field of direct taxation, and on the other, the so-called objective concept of aid requiring the assessment of measures on the basis of actual effects, i.e. enabling taxes to be included in the scope of Article 107 TFEU. In the three-element test developed in the case law of the Court of Justice, taxes and the so-called special levies – charges imposed “on top” of the tax system – are treated differently in the reference framework used to assess selectivity. In analysing the most recent acquis, the author argues that this differentiated treatment is unjustified; that it constitutes an artificial division which, under the already highly suboptimal conditions of the existing Treaty-based division of competences, only needlessly complicates the interpretation of Article 107 TFEU and of the selectivity criterion, which is already difficult to apply.

References/Bibliografia

Cnossen, S., & Dictus, G. (2021). Big on big, small on small: Never ending promise? Critical assessment of the commission decision practice with regard to the effect on trade criterion. European State Aid Law Quarterly, 20(1), 30–40. https://doi.org/10.21552/estal/2021/1/5

García, R., & Ferreiro Serret, E. (2016). Hardening the preliminary reference procedure in a Union in crisis: Kernkraftwerke Lippe-Ems. Common Market Law Review, 53(3), 819–837. https://doi.org/10.54648/cola2016067

Gau, L. (2024). Limitation of competences in EU State aid control: A process of dynamic integration. German Yearbook of International Law, 67(1), 537–539.

Heimler, A., & Jenny, F. (2012). The limitations of European Union control of State aid. Oxford Review of Economic Policy, 28(2), 347–367. https://doi.org/10.1093/oxrep/grs005

Kalyka, C. N. (2023). Selectivity and Proportionality. European State Aid Law Quarterly, 22(1), 42–52. https://doi.org/10.21552/estal/2023/1/6

Kociubiński, J. (2018). Selektywna korzyść krajowych środków podatkowych w prawie pomocy publicznej Unii Europejskiej, Europejski Przegląd Sądowy, (11), 10–15.

Kociubiński, J. (2025). Funding through resources collected from private entities bypassing the state budget may involve state resources: Cases C-790/21 P, Covestro Deutschland; C-792/21 P, AZ; C-794/21 P, Infineon technologies; and C-795/21 P, WEPA Hygieneprodukte. Journal of European Competition Law & Practice, 16(6). https://doi.org/10.1093/jeclap/lpaf005

Kokkoris, I., & Shelanski, H. (2014). EU Merger Control. A Legal and Economic Analysis. Oxford University Press.

Kurcz, B., & Vallindas, D. (2008). Can general measures be… selective? Some thoughts on the interpretation of a state aid definition. Common Market Law Review, 45(1), 159–182. https://doi.org/10.54648/cola2008007

Lo Schiavo, G. (2013). The General Court reassesses the British Aggregates Levy: Selective advantages ‘permeated’ by an exercise on the actual effects of competition? Annotation on the judgment of the General Court (First Chamber, Extended Composition) of 7 March 2012 in Case T-210/02 RENV, British Aggregates Association v Commission. European State Aid Law Quarterly, 12(2), 383–390.

Loewenthal, P.-J. (2019). Fiscal selectivity: A notion in need of clarity. In: C. de Pietro (Ed.). New Perspectives on Fiscal State Aid: Legitimacy and Effectiveness of Fiscal State Aid Control. Kluwer.

López, H. (2010). General thought on selectivity and consequences of a broad concept of state aid in tax matters. European State Aid Law Quarterly, 9(4), 807–819.

Luja, R. (2010). Revisiting the balance between aid, selectivity and selective aid in respect of taxes and special levies. European State Aid Law Quarterly, 9(1), 161–168.

Luja, R. (2016). Do State aid rules still allow European Union Member States to claim fiscal sovereignty? EC Tax Review, 25(5/6), 312–324.

Mason, R. (2023). Tax competition and state aid. Yearbook of European Law, 42, 262–285. https://doi.org/10.1093/yel/yead001

McMahon, C. (2024). Selectivity as discrimination: Lessons from the case law on fiscal measures for identifying State aid. Yearbook of European Law, 43, 261–296. https://doi.org/10.1093/yel/yeae005

Merola, M. (2016). The rebus of selectivity in fiscal aid: A nonconformist view on and beyond case law. World Competition, 39(4), 533–556.

Micheau, C. (2014). Tax selectivity in European Law of State Aid – legal assessment and alternative approaches. University of Luxembourg Law Working Paper, No. 2014-06.

Mörmel, L. (2023). The analogous application of State Aid Law to asymmetric taxes. Can the imposition of a special charge be State aid within the meaning of Article 107(1) TFEU? European State Aid Law Quarterly, 22(3), 267–275. https://doi.org/10.21552/estal/2023/3/5

Nicolaides, P. (2017). Excessive widening of the concept of selectivity. European State Aid Law Quarterly, 16(1), 62–72. https://doi.org/10.21552/estal/2017/1/9

Nicolaides, P., & Rusu, I. E. (2012). The concept of selectivity: An ever wider scope. European State Aid Law Quarterly, 11(4), 791–803. https://doi.org/10.21552/ESTAL/2012/4/314

Pérez Bernabeu, B. (2020). The Spanish Hydroelectric Tax: Asymmetrical Taxation with Environmental Flavour: Annotation on the Judgment of the Court (Fifth Chamber) of 7 November 2019 in Joined Cases C-105/18 to C-113/18 UNESA. European State Aid Law Quarterly, 19(3), 352–358. https://doi.org/10.21552/estal/2020/3/12

Piotrowski, S. (2025). Fiscal State Aid Schemes: Selectivity and Limits to Enforcement. Kluwer.

Prek, M., & Lefèvre, S. (2012). The requirement of selectivity in the recent case-law of the Court of Justice. European State Aid Law Quarterly, 11(2), 335–346.

Rapp, J. (2021). Taxation and State aid. In: L. Hancher, & J. J. Piernas López (Eds.). Research Handbook on European State Aid Law. Edward Elgar.

Romariz, C. (2014). Revisiting material selectivity in EU State Aid Law – or “The Ghost of Yet-To-Come”. European State Aid Law Quarterly, 9(1), 161–168.

Rossi-Maccanico, P. (2013). EU review of direct tax measures: Interplay between fundamental freedoms and State aid control. EC Tax Review, 22(1), 19–28. https://doi.org/10.54648/ECTA2013003

Szudoczky, R. & Karolyi, B. (2020). Progressive Turnover Taxes under the Prism of the State Aid Rules: Effective Tools to Tax High Financial Capacity or Inconsistent Tax Design Granting Selective Advantages? European State Aid Law Quarterly, 11(4), 251–270.

Temple Lang, J. (2014). EU State Aid rules – the need for substantive reform. European State Aid Law Quarterly, 13(3), 440–453.

Traversa, E., & Sabbadin, P. M. (2017). State-aid policy and the fight against harmful tax competition in the internal market: Tax policy in disguise? In: W. Haslehner, G. Kofler, A. Rust (Eds.). EU Tax Law and Policy in the 21st Century. Kluwer.

Whish, R., & Bailey, D. (2019). Competition Law. Tenth Edition. Oxford University Press.