1.

Article 3(2) and Article 4(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that, in circumstances such as those in the main proceedings, the mere signing of a contract concluded by a consumer with a seller or supplier which provides that, by signing the contract, the consumer accepts all of the contractual terms drafted in advance by the seller or supplier, does not lead to a rebuttal of the presumption that such terms had not been individually negotiated.

2.

Article 3(3) of Directive 93/13, read in conjunction with the Annex thereto, must be interpreted as meaning that an express forfeiture clause and a penalty clause, such as those at issue in the main proceedings, contained in a contract concluded by a consumer with a seller or supplier that are exclusively in favour of, and were drafted in advance by, the seller or supplier, are liable to constitute unfair terms referred to in paragraph 1(d) to (f) of that Annex, which is a matter for the national court to determine.

3.

Article 6 of Directive 93/13 must be interpreted as meaning that, where an express forfeiture clause and a penalty clause contained in a promissory contract for sale and purchase concluded between a consumer and a seller or supplier are held to be unfair, the national court cannot remedy the invalidity of such unfair terms by substituting its own decision, unless the contract cannot continue to exist after those unfair terms are deleted and the cancellation of the contract in its entirety would expose the consumer to particularly detrimental consequences.

1.

Are Paragraphs 6(1) and 27(1) of the EG-FGV (1) and/or Articles 18(1) and 26(1) of Directive 2007/46/EC (2) to be interpreted as meaning that the manufacturer is in breach of its obligation to issue a valid certificate pursuant to Paragraph 6(1) of the EG-FGV (and/or of its obligation to deliver a certificate of conformity pursuant to Article 18(1) of Directive 2007/46), if it has installed in the vehicle an impermissible defeat device within the meaning of Articles 5(2) and 3.10 of Regulation (EC) No 715/2007, (3) and that the placing of such a vehicle on the market is in breach of the prohibition on placing a vehicle on the market without a valid certificate of conformity pursuant to Paragraph 27(1) of the EG-FGV (and/or of the prohibition of sale without a valid certificate of conformity pursuant to Article 26(1) of Directive 2007/46)?

If that question is to be answered in the affirmative:

2.

Is Article 5(2) of Regulation (EC) No 715/2007 also aimed in particular at protecting the end customer, including in relation to that customer’s freedom of disposal and assets? Does an end customer’s acquisition of a vehicle in which an impermissible defeat device has been installed come within the scope of the risks for the prevention of which that provision was adopted?

—

that obligation does not require a specific reason in terms of location, time or region,

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the following data are the subject of the storage obligation in the provision of publicly available telephone services — including the transmission of short messages, multimedia messages or similar messages and unanswered or unsuccessful calls:

—

the following data are the subject of the storage obligation in the provision of publicly available internet access services:

—

the following data must not be stored:

—

the retention period is four weeks for location data, that is to say, the designation of the cell used, and ten weeks for the other data,

—

effective protection of retained data against risks of misuse and against any unlawful access to that data is ensured, and

—

the retained data may be used only to prosecute particularly serious criminal offences and to prevent a specific threat to life and limb or a person’s freedom or to the continued existence of the Federal Republic or of a Federal Land, with the exception of the Internet Protocol address allocated to a subscriber for internet use, the use of which data is permissible in the context of the provision of inventory data information for the prosecution of any criminal offence, maintaining public order and security and carrying out the tasks of the intelligence services?

—

that obligation does not require a specific reason in terms of location, time or region,

—

the following data are the subject of the storage obligation in the provision of publicly available telephone services — including the transmission of short messages, multimedia messages or similar messages and unanswered or unsuccessful calls:

—

the following data are the subject of the storage obligation in the provision of publicly available internet access services:

—

the following data must not be stored:

—

the retention period is four weeks for location data, that is to say, the designation of the cell used, and ten weeks for the other data,

—

effective protection of retained data against risks of misuse and against any unlawful access to that data is ensured, and

—

the retained data may be used only to prosecute particularly serious criminal offences and to prevent a specific threat to life and limb or a person’s freedom or to the continued existence of the Federal Republic or of a Federal Land, with the exception of the Internet Protocol address allocated to a subscriber for internet use, the use of which data is permissible in the context of the provision of inventory data information for the prosecution of any criminal offence, maintaining public order and security and carrying out the tasks of the intelligence services?

1.

Based on the judgment of the Court of Justice of the European Union of 24 October 1996, Elida Gibbs, C-317/94 (EU:C:1996:400), is a pharmacy which supplies medicinal products to a statutory health insurance fund entitled to reduce the taxable amount as a result of a discount granted to the persons insured under a health insurance scheme?

2.

In the event that this is answered in the affirmative: Is it contrary to the principles of neutrality and equal treatment in the internal market if a pharmacy in the national territory is able to reduce the taxable amount, but a pharmacy which supplies the statutory health insurance fund by means of an intra-Community, tax-exempt supply from another Member State is not able to do so?

1.

Is Article 21 of Regulation (EU) No 1215/2012 (1) applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work?

2.

Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the Arbeits- und Sozialgerichtsgesetz (Law on the labour and social courts; ‘the ASGG’)?

3.

Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of his employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?

4.

In the event that Questions 2 and 3 are answered in the negative:

5.

Is Article 7(1) of Regulation (EU) No 1215/2012 applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work, if it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the ASGG, or if it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of the employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?

1.

Are Paragraphs 6(1) and 27(1) of the EG-Fahrzeuggenehmigungsverordnung (EC Vehicle Approval Regulation; EG-FGV) (1) and/or Articles 18(1) and 26(1) of Directive 2007/46/EC (2) to be interpreted as meaning that the manufacturer is in breach of its obligation to issue a valid certificate pursuant to Paragraph 6(1) of the EG-FGV (and/or of its obligation to deliver a certificate of conformity pursuant to Article 18(1) of Directive 2007/46/EC), if it has installed in the vehicle an impermissible defeat device within the meaning of Articles 5(2) and 3.10 of Regulation (EC) No 715/2007, (3) and that the placing of such a vehicle on the market is in breach of the prohibition on placing a vehicle on the market without a valid certificate of conformity pursuant to Paragraph 27(1) of the EG-FGV (and/or of the prohibition of sale without a valid certificate of conformity pursuant to Article 26(1) of Directive 2007/46/EC)?

If that question is to be answered in the affirmative:

2.

Is Article 5(2) of Regulation (EC) No 715/2007 also aimed at protecting the end customer and — in the case of resale on the second-hand market — in particular the subsequent car buyer, including in relation to his freedom of disposal and his assets? Does a car buyer’s acquisition of a used vehicle in which an inadmissible defeat device has been installed come within the area of the risks for the prevention of which this standard was adopted?

3.

Are Paragraphs 6 and 27 of the EG-FGV, and/or Articles 18(1), 26(1) and 46 of Directive 2007/46/EC and Article 5(2) of Regulation (EC) No 715/2007, to be interpreted as meaning that, in the event of a breach thereof, the offsetting of compensation for the actual use made of the vehicle against the damage incurred by the end customer is wholly or partially inapplicable (as appropriate: in what manner and to what extent?), if the end customer may demand, and does demand, the rescission of the vehicle purchase contract as a result of that breach? Would that interpretation be different if the breach also involves the deception of the approval authorities and of end customers into believing that all the conditions for approval have been met and that the use of the vehicle on the roads is permissible without restriction, and that there has been a breach and deception for the purpose of reducing costs and maximising profits through high sales figures with the simultaneous creation of a competitive advantage at the expense of unsuspecting customers?

1.

Are Paragraphs 6(1) and 27(1) of the EG-FGV (1) and/or Articles 18(1) and 26(1) of Directive 2007/46/EC (2) to be interpreted as meaning that the manufacturer is in breach of its obligation to issue a valid certificate pursuant to Paragraph 6(1) of the EG-FGV (and/or of its obligation to deliver a certificate of conformity pursuant to Article 18(1) of Directive 2007/46/EC), if it has installed in the vehicle an impermissible defeat device within the meaning of Articles 5(2) and 3.10 of Regulation (EC) No 715/2007, (3) and that the placing of such a vehicle on the market is in breach of the prohibition on placing a vehicle on the market without a valid certificate of conformity pursuant to Paragraph 27(1) of the EG-FGV (and/or of the prohibition of sale without a valid certificate of conformity pursuant to Article 26(1) of Directive 2007/46/EC)?

If the answer to (1) is in the affirmative:

2.

Is Article 5(2) of Regulation (EC) No 715/2007 also aimed at protecting the end customer, including in relation to his freedom of disposal and his assets? Does a car buyer’s acquisition of a used vehicle in which an inadmissible defeat device has been installed come within the area of the risks for the prevention of which this standard was adopted?

3.

Must Paragraphs 6 and 27 of the EG-FGV and/or Articles 18(1), 26(1) and 46 of Directive 2007/46/EC and Article 5(2) of Regulation (EC) No 715/2007 be interpreted as meaning that, in the event of a breach thereof, the offsetting of compensation for the actual use made of the vehicle against the damage incurred by the end customer is wholly or partially inapplicable (as appropriate: in what manner and to what extent?), if the end customer may demand, and does demand, the rescission of the vehicle purchase contract as a result of that breach? Would that interpretation be different if the breach also involves the deception of the approval authorities and of end customers into believing that all the conditions for approval have been met and that the use of the vehicle on the roads is permissible without restriction, and that there has been a breach and deception for the purpose of reducing costs and maximising profits through high sales figures with the simultaneous creation of a competitive advantage at the expense of unsuspecting customers?

1

Can the exercise of the right to strike by airline staff be regarded as an ‘extraordinary circumstance’ within the meaning of Article 5(3) of Regulation 261/20[0]4 (1)where the strike is called by a trade union in pursuit of improvements to employment conditions and is not triggered by a prior decision of the employer but by the employees’ demands, or is it a circumstance inherent in the normal exercise of an air carrier’s activity?

2

In circumstances such as those at issue in these proceedings, even where the carrier has been given the advance notice of the strike required by law, is the carrier required to adopt some legally permissible measure, such as offering flights with other airlines unaffected by the strike, for example?

3

For the purposes of considering whether a strike by the airline’s cabin staff is an ‘extraordinary circumstance’ within the meaning of Article 5(3) of Regulation 261/20[0]4, is the way in which the strike is called off relevant, particularly where it is called off as the result of reciprocal concessions made by the parties to the dispute?

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declare that, by failing to take all the measures necessary to comply with the judgment of 12 April 2018 delivered in Case C-110/17, Commission v Belgium, the Kingdom of Belgium failed to fulfil its obligations under Article 260(1) TFEU;

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impose on the Kingdom of Belgium a penalty payment of EUR 22 076.55 per day of delay in complying with the judgment delivered in Case C-110/17, referred to above, from the date of delivery of the judgment in the present case until the date on which the judgment delivered in Case C-110/17, referred to above, has been complied with, payable to an account specified by the Commission;

—

order the Kingdom of Belgium to pay a minimum lump sum of EUR 2 029 000 or, in the event that the amount of that minimum lump sum is exceeded, of a daily lump sum of EUR 4 905.90 from the date of delivery of the judgment in Case C-110/17, referred to above, until the date of delivery of the judgment in the present case or until the date of compliance with the judgment delivered in Case C-110/17, referred to above, whichever is the earlier, payable to an account specified by the Commission;

—

order the Kingdom of Belgium to pay the costs.

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set aside the judgment under appeal insofar as it dismissed the action as inadmissible;

—

declare the action brought by the appellant admissible and refer the case back to the General Court to rule on the merits of the case; and

—

order the Council to pay the costs of these proceedings and of the proceedings before the General Court.

1.

The General Court applied the wrong test to assess whether the Bolivarian Republic of Venezuela is directly concerned by the contested provisions (1).

2.

The General Court erred in law since it overlooked some essential circumstances of the present case when applying the direct concern criterion as established in Almaz-Antey.

3.

The General Court neglected to consider the factual effects of the contested provisions on the Bolivarian Republic of Venezuela.

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set aside the order delivered by the General Court on 10 October 2019, Aeris Invest v SRC, T-599/18, EU:T:2019:740, in so far it found the action to be inadmissible;

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remit the case to the General Court for judgment, bound by the decision of the Court of Justice on points of law, in accordance with the forms of order sought by the appellant at first instance; and

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reserve the decision as to costs.

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set aside point 2 of the operative part of the judgment of the General Court (Second Chamber, Extended Composition) of 24 September 2019 in Case T- 105/17, HSBC Holdings plc and Others v European Commission;

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annul Article 1(b) of Commission Decision C(2016) 8530 final of 7 December 2016 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39914 – Euro Interest Rate Derivatives (EIRD)) (1); alternatively, annul Article 1(b) in so far as it refers to HSBC’s participation in a single and continuous infringement after 19 March 2007; and

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order the Commission to pay HSBC’s costs arising from Case T-105/17 and the present appeal.

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set aside the judgment of the General Court (Seventh Chamber, Extended Composition) of 24 September 2019 in joined Cases T-755/15 and T-759/15;

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annul the contested decision of the Commission of 21 October 2015 (1) in accordance with Article 263(4) TFEU; or in the alternative, if and to the extent that the Court should be unable to make a final decision, refer the case back to the General Court; and

—

order the Commission to pay Fiat Chrysler Finance Europe’s costs pursuant to Articles 138(1), 184(1) and (2) of the Rules of Procedure of the Court of Justice and to pay Fiat Chrysler Finance Europe’s costs at first instance.

—

set aside the judgment under appeal;

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reject the second limb of the first plea of the application at first instance, as re-stated in the contested judgment as unfounded;

—

rule itself on the merits of the second limb of the first plea of the application at first instance, as re-stated in the contested judgment;

—

refer the case back to the General Court so that it can decide upon the applicant’s remaining pleas on infringements in law; and

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order the applicant to pay the appellant’s legal costs and expenses of this procedure as well as the legal costs and expenses of the proceedings at first instance and on appeal.

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set aside the judgment under appeal;

—

reject the first and second pleas of the application at first instance as unfounded in law;

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refer the case for the third and fourth pleas of the application at first instance to the General Court for reconsideration;

—

reserve the costs at first instance and on appeal for final judgment by the General Court.

1.

Must Article 18 TFEU be interpreted as meaning that a Member State of the European Union which gives a ruling on the extradition to a third State of a national of a State that is not a Member State of the European Union but is a Member State of the Schengen area is required to inform that Member State of the Schengen area which granted nationality to that person of the extradition request?

2.

If the answer to the preceding question is in the affirmative and the Member State of the Schengen area has requested the surrender of that person in order to conduct the proceedings in respect of which extradition is requested, must that person be surrendered to that State, in accordance with the Agreement between the European Union and the Republic of Iceland and the Kingdom of Norway on the surrender procedure between the Member States of the European Union and Iceland and Norway?

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hold that there has been no unlawful State Aid, annul Article 1 of Commission Decision C (2019) 2526 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption, insofar as it finds that there has been unlawful State aid, and set aside the requirement for the UK to recover alleged unlawful State aid received by the applicants in this context (Articles 2 and 3 of the contested decision);

—

in the alternative, annul Articles 2 and 3 of the contested decision insofar as they require the UK to recover from the applicants the alleged State Aid; and

—

in any event, order the Commission to bear the costs incurred by the applicants for these proceedings.

1.

First plea in law, alleging that the Commission misunderstands the context, aim and operation of the UK Controlled Foreign Company (CFC) rules, with respect to the treatment of non-trading finance profits. The Commission’s conclusions in the contested decision are based on cumulative manifest errors. In particular, the Commission has made manifest errors in its understanding of the overall UK tax system, in its understanding of the aims of the CFC system, in the specific scope of the Group Financing Exemption and in the definition of qualifying loan relationships.

2.

Second plea in law, alleging that the Commission wrongly construes the Group Financing Exemption as a tax exemption and accordingly an advantage. In relation to non-trading finance profits, the Group Financing Exemption represents a charging provision and a part of the definition of the limits of the CFC rules, not a selective advantage. The Commission has provided no quantitative analysis to show that it is an advantage and, in the absence of cogent evidence that the measure in question results in an advantage, the contested decision cannot stand.

3.

Third plea in law, alleging that the Commission misidentified the reference system for the assessment of the effects of the CFC rules and wrongly identified the CFC rules as a distinct set of rules from the overall UK corporation tax system. The Commission has not correctly understood the objective of the CFC rules and has failed to consider the UK’s margin for discretion.

4.

Fourth plea in law, alleging that the Commission has shown manifest errors in its State aid analysis, and has applied the wrong tests when considering the question of comparability. The Commission failed to recognize the different level of risk to the UK tax base as between lending to a group entity which is taxable in the UK and lending to a group entity which is not taxable in the UK, and irrationally concluded that intra-group lending is comparable to third-party lending.

5.

Fifth plea in law, alleging that, even assuming that the CFC measures in question prima facie constituted aid within the meaning of Article 107(1) TFEU, the contested decision wrongly concluded that there was no justification that could apply to defend the compatibility of the measures in question with EU State aid rules. In addition, the contested decision is irrational and inconsistent, in that the Commission has correctly accepted that Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 is justified in cases where the only reason for a CFC charge to apply under the counterfactual of the said Chapter 5 would be the ‘UK connected capital’ test, on the basis that that test may be excessively difficult to operate in practice, but at the same time, and without providing adequate reasoning, the Commission contends that the said Chapter 9 is never justified in cases where the significant people functions test would cause a CFC charge to apply under the said Chapter 5. In fact, the significant people functions test is excessively difficult to apply in practice, such that the Commission should have found the said Chapter 9 to be justified in the context of that test as well and, hence, it should have concluded that there is no State aid.

6.

Sixth plea in law, alleging that were the contested decision to be upheld, then enforcement of it through recovery of the alleged State aid from the applicants will infringe fundamental principles of EU law, including the freedom of establishment and the freedom to provide services, noting that, in the applicants’ case, the CFCs in question are situated in other Member States.

7.

Seventh plea in law, alleging that the recovery order resulting from the contested decision is unfounded and contrary to fundamental Union principles.

8.

Eighth plea in law, alleging that the Commission failed to provide adequate reasons for critical elements in the contested decision, such as the conclusion that the CFC charge under the said Chapter 5 could be applied using the significant people functions test without difficulty or disproportionate burden.

9.

Ninth plea in law, alleging that the contested decision also breaches the principle of good administration, which requires that the Commission allows transparency and predictability in its administrative procedures and renders its decisions within a reasonable time-frame. It is not reasonable for the Commission to take more than four years to issue its decision opening the investigation in the present case and to give a decision more than six years after the contested measure came into effect.

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annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing (OJ 2019 L 216, p. 1), in so far as it holds that the alleged aid measure constitutes aid in the sense of Article 107(1) TFEU and orders its recovery with interest, including from the applicants;

—

in the alternative, annul Articles 2, 3 and 4 of the contested decision to the extent that it orders the recovery of incompatible aid with interest, including from the applicants;

—

order the Commission to bear its own costs and the applicants’ costs in connection with these proceedings.

1.

First plea in law, alleging that the Commission has violated Article 107(1) TFEU by holding that the alleged aid measure provides a selective advantage:

2.

Second plea in law, alleging that the Commission has violated Article 107(1) TFEU by failing to demonstrate that the alleged aid measure was liable to affect trade between Member States and threatened to distort competition.

3.

Third plea in law, alleging, alternatively, the Commission violated Article 49 TFEU by qualifying the alleged aid measure as incompatible State aid that does not breach the freedom of establishment as guaranteed by Article 49 TFEU.

4.

Fourth plea in law, alleging that the Commission has violated the fundamental principle of equal treatment/non-discrimination by:

5.

Fifth plea in law, alleging, in the alternative, that, even if the alleged aid measure falls within the ambit of Article 107(1) TFEU, the Commission has violated Article 16(1) of the Council Regulation (EU) 2015/1589, (2) by ordering the recovery of amounts of alleged incompatible aid from the beneficiaries of the alleged aid measure, because such recovery infringes general principles of EU law, namely the principle of legitimate expectations and legal certainty.

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annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicants’ costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission, contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and, in the contested decision, it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicants rely on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicants’ freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

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annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the “75% exemption” under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and, in the contested decision, it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries “to the extent attributable to domestic assets and activities” does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and, in the contested decision, it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU and/or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicants’ costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas the that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicants rely on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicants’ freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicants’ costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicants rely on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicants’ freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the contested measure gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

hold that there has been no unlawful State Aid, annul Article 1 of the decision C(2019) 2526 Final of 2 April 2019 on the State aid SA.44896, implemented by the United Kingdom concerning CFC Group Financing Exemption, insofar as it finds that there has been unlawful State Aid and set aside the requirement for the UK to recover alleged unlawful State Aid received by the applicants in this context (Articles 2 and 3 of the contested decision);

—

in the alternative, annul Articles 2 and 3 of the contested decision, insofar as they require the UK to recover the alleged State aid; and

—

in any event, order the Commission to bear the costs incurred by the applicants for these proceedings.

1.

First plea in law, alleging that the Commission misunderstands the context, aim and operation of the UK Controlled Foreign Company (CFC) rules, with respect to the treatment of non-trading finance profits. The Commission’s conclusions in the contested decision are based on cumulative manifest errors. In particular, the Commission has made manifest errors in its understanding of the overall UK tax system, in its understanding of the aims of the CFC system, in the specific scope of the Group Financing Exemption and in the definition of qualifying loan relationships.

2.

Second plea in law, alleging that the Commission wrongly construes the Group Financing Exemption as a tax exemption and accordingly an advantage. In relation to non-trading finance profits, the Group Financing Exemption represents a charging provision and a part of the definition of the limits of the CFC rules, not a selective advantage. The Commission has provided no quantitative analysis to show that it is an advantage and, in the absence of cogent evidence that the measure in question results in an advantage, the contested decision cannot stand.

3.

Third plea in law, alleging that the Commission misidentified the reference system for the assessment of the effects of the CFC rules and wrongly identified the CFC rules as a distinct set of rules from the overall UK corporation tax system. The Commission has not correctly understood the objective of the CFC rules and has failed to consider the UK’s margin for discretion.

4.

Fourth plea in law, alleging that the Commission has shown manifest errors in its State aid analysis, and has applied the wrong tests when considering the question of comparability. The Commission failed to recognise the different level of risk to the UK tax base as between lending to a group entity which is taxable in the UK and lending to a group entity which is not taxable in the UK and irrationally concluded that intra-group lending is comparable to third-party lending.

5.

Fifth plea in law, alleging that, even assuming that the CFC measures in question prima facie constituted aid within the meaning of Article 107(1) TFEU, the contested decision wrongly concluded that there was no justification that could apply to defend the compatibility of the measures in question with EU State aid rules. In addition, the contested decision is irrational and inconsistent, in that the Commission has correctly accepted that Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 is justified in cases where the only reason for a CFC charge to apply under the counterfactual of Chapter 5 of the said Part 9A would be the ‘UK connected capital’ test, on the basis that that test may be excessively difficult to operate in practice, but at the same time, and without providing adequate reasoning, the Commission contends the said Chapter 9 is never justified in cases where the significant people functions test would cause a CFC charge to apply under the said Chapter 5. In fact, the significant people functions test is excessively difficult to apply in practice, such that the Commission should have found the said Chapter 9 to be justified in the context of that test as well and, hence, it should have concluded that there is no State aid.

6.

Sixth plea in law, alleging that, were the contested decision to be upheld, enforcement of it through recovery of the alleged State aid from the applicants would infringe fundamental principles of EU law, including the freedom of establishment and the freedom to provide services, noting that, in the applicants’ case, the CFCs in question are situated in other Member States.

7.

Seventh plea in law, alleging that the recovery order resulting from the contested decision is unfounded and contrary to fundamental Union principles.

8.

Eighth plea in law, alleging that the Commission failed to provide adequate reasons for critical elements in the contested decision, such as the conclusion that the CFC charge under the said Chapter 5 could be applied using the significant people functions test without difficulty or disproportionate burden.

9.

Ninth plea in law, alleging that the contested decision also breaches the principle of good administration, which requires that the Commission allows transparency and predictability in its administrative procedures and renders its decisions within a reasonable time-frame. It is not reasonable for the Commission to take more than four years to issue its decision opening the investigation in the present case and to give a decision more than six years after the contested measure came into effect.

—

annul Commission decision C(2019) 2526 Final of 2 April 2019 on the State aid SA.44896, implemented by the United Kingdom concerning Controlled Foreign Companies (CFC) Group Financing Exemption;

—

in any event, order the Commission to bear the costs incurred by the applicants for these proceedings.

1.

First plea in law, alleging that the Commission has made an error of law and a manifest error of assessment in concluding that the relevant reference system is the CFC rules rather than the UK corporate tax system. In particular, the Commission's conclusion that the reference system is the UK CFC rules misapplies the EU courts' jurisprudence. The Commission should instead have concluded that the appropriate reference system was the UK corporate tax system, of which the CFC rules are an intrinsic and inextricable part.

2.

Second plea in law, alleging that the Commission has made an error of law and a manifest error of assessment in relation to the objectives of the reference system.

3.

Third plea in law, alleging that the Commission has made an error of law, a manifest error of assessment and failed to state reasons in concluding that the Group Financing Exemption amounts to a selective derogation from the reference system and, in particular, that undertakings in receipt of other types of non-trading finance profits are in a comparable legal and factual position to undertakings in receipt of non-trading finance profits from qualifying loans. Indeed, the Commission erred in concluding that non-trading finance profits from upstream loans and moneyboxes do not give rise to significant and materially greater risk of artificial diversion than qualifying loans. Further, the Commission erred by focusing on the legislative technique, rather than the effects, of the Group Financing Exemption.

4.

Fourth plea in law, alleging that the Commission has made an error of law, a manifest error of assessment and failed to state reasons in concluding that the Group Financing Exemption was not justified by the nature and overall structure of the tax rules in relation to the significant people functions test. In particular, the Commission made an error in concluding that the administrative burden of applying the significant people functions test does not justify the Group Financing Exemption, and that the Group Financing Exemption is not justified by the necessity of complying with the freedoms in the Treaty on the Functioning of the EU.

5.

Fifth plea in law, alleging that the Commission has made an error of law and manifest error of assessment regarding the existence of an advantage, as required by Article 107 TFEU. The Commission’s assessment is based on unsubstantiated assertions and it has failed to actually show that there is an advantage, not simply stipulate that there could be one in certain circumstances.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the contested measure gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas the Council Directive (EU) 2016/1164 did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application for (in the alternative) annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

i.

annul the Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1) in its entirety;

ii.

alternatively, annul Commission Decision (EU) 2019/1352 insofar as it concludes that section 371ID of the Taxation (International and Other Provisions) Act 2010 amounted to unlawful State aid for the purposes of Article 107(1) of the Treaty on the Functioning of the European Union;

iii.

alternatively annul Articles 2, 3 and 4 of Commission Decision (EU) 2019/1352;

iv.

in any event, order the European Commission to bear all costs incurred in respect of this application.

1.

First plea in law, alleging that the Commission selected an invalid reference system for the purposes of its selectivity analysis. Judged against the appropriate reference system, the group financing exemption scheme (‘the contested measure’) is not a derogation and is not selective.

2.

Second plea in law, alleging that the Commission fundamentally misunderstood the nature of the primary objective of its chosen reference system and failed to take into account all objectives of that system, leading it to apply an incomplete and hypothetical reference system.

3.

Third plea in law, alleging that the Commission fundamentally mischaracterised the role of the contested measure, seemingly on the inappropriate basis of regulatory technique. As properly understood, the contested measure is not a derogation from the Commission's chosen reference system.

4.

Fourth plea in law, alleging that the Commission was incorrect to conclude that the contested measure differentiated between undertakings which, in light of the objectives of its chosen reference system, were comparable.

5.

Fifth plea in law, alleging that the Commission failed to recognise that the contested measure does not constitute a selective advantage because it derives from the guiding principles and flows from the nature of the Commission's chosen reference system and is an inherent mechanism necessary for that system's functioning and effectiveness.

6.

Sixth plea in law, alleging that the Commission decision exceeds the Commission's powers in the field of State aid, contrary to the United Kingdom's fiscal sovereignty.

7.

Seventh plea in law, alleging that the Commission's conduct of its investigation into the contested measure breached Article 108(2) of the Treaty on the functioning of the European Union and Article 6 of Regulation (EU) 2015/1589, (1) as well as its duty of good administration under Article 41 of the Charter of Fundamental Rights of the European Union.

8.

Eighth plea in law, alleging that the Commission breached its duty to give reasons under Article 296 of the Treaty on the Functioning of the European Union.

9.

Ninth plea in law, alleging that the Commission failed to recognise that section 371ID of the Taxation (International and Other Provisions) Act 2010 was entirely justified and did not constitute a selective advantage.

10.

Tenth plea in law, alleging that recovery should not be ordered as, following Case C-196/04 Cadbury Schweppes, (2) it would breach general principles of EU law relating to the fundamental freedom of establishment.

11.

Eleventh plea in law, alleging that recovery should not be ordered because the Commission's directions in respect of recovery are ultra vires and breach general principles of EU law relating to the recovery of unlawful State aid.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU, and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and so the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

hold that there has been no unlawful State Aid, annul Article 1 of the contested decision C(2019) 2526 Final of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption, to the extent that it finds that there has been unlawful State Aid, and set aside the requirement for the UK to recover alleged unlawful State Aid received by the applicant in this context (Articles 2 and 3 of the contested decision);

—

in the alternative, annul Articles 2 and 3 of the contested decision, insofar as they require the UK to recover from the applicant the alleged State Aid; and

—

in any event, order the Commission to bear the costs incurred by the applicant for these proceedings.

1.

First plea in law, alleging that the Commission misunderstands the context, aim and operation of the UK Controlled Foreign Company (CFC) rules, with respect to the treatment of non-trading finance profits. The Commission’s conclusions in the contested decision are based on cumulative manifest errors. In particular, the Commission has made manifest errors in its understanding of the overall UK tax system, in its understanding of the aims of the CFC system, in the specific scope of the Group Financing Exemption and in the definition of qualifying loan relationships.

2.

Second plea in law, alleging that the Commission wrongly construes the Group Financing Exemption as a tax exemption and accordingly an advantage. In relation to non-trading finance profits, the Group Financing Exemption represents a charging provision and a part of the definition of the limits of the CFC rules, not a selective advantage. The Commission has provided no quantitative analysis to show that it is an advantage and, in the absence of cogent evidence that the measure in question results in an advantage, the contested decision cannot stand.

3.

Third plea in law, alleging that the Commission misidentified the reference system for the assessment of the effects of the CFC rules and wrongly identified the CFC rules as a distinct set of rules from the overall UK corporation tax system. The Commission has not correctly understood the objective of the CFC rules and has failed to consider the UK’s margin for discretion.

4.

Fourth plea in law, alleging that the Commission has shown manifest errors in its State aid analysis, and has applied the wrong tests when considering the question of comparability. The Commission failed to recognise the different level of risk to the UK tax base as between lending to a group entity which is taxable in the UK and lending to a group entity which is not taxable in the UK and irrationally concluded that intra-group lending is comparable to third-party lending.

5.

Fifth plea in law, alleging that even assuming that the CFC measures in question prima facie constituted aid within the meaning of Article 107(1) TFEU, the contested decision wrongly concluded that there was no justification that could apply to defend the compatibility of the measures in question with EU State aid rules. In addition, the contested decision is irrational and inconsistent, in that the Commission has correctly accepted that Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 is justified in cases where the only reason for a CFC charge to apply under the counterfactual of Chapter 5 of the said Part 9A would be the ‘UK connected capital’ test, on the basis that that test may be excessively difficult to operate in practice, but at the same time, and without providing adequate reasoning, the Commission contends that the said Chapter 9 is never justified in cases where the significant people functions test would cause a CFC charge to apply under the said Chapter 5. In fact, the significant people functions test is excessively difficult to apply in practice, such that the Commission should have found the said Chapter 9 to be justified in the context of that test as well and, hence, it should have concluded that there is no State aid.

6.

Sixth plea in law, alleging that, were the contested decision to be upheld, enforcement of it through recovery of the alleged State aid from the applicant would infringe fundamental principles of EU law, including the freedom of establishment and the freedom to provide services, noting that, in the applicant’s case, the CFCs in question are situated in other Member States.

7.

Seventh plea in law, alleging that the recovery order resulting from the contested decision is unfounded and contrary to fundamental Union principles.

8.

Eighth plea in law, alleging that the Commission failed to provide adequate reasons for critical elements in the contested decision, such as the conclusion that the CFC charge under the said Chapter 5 could be applied using the significant people functions test without difficulty or disproportionate burden.

9.

Ninth plea in law, alleging that the contested decision also breaches the principle of good administration, which requires that the Commission allows transparency and predictability in its administrative procedures and renders its decisions within a reasonable time-frame. It is not reasonable for the Commission to take more than four years to issue its decision opening the investigation in the present case and to give a decision more than six years after the contested measure came into effect.

—

annul the contested decision C(2019) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning Controlled Foreign Companies (CFC) Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU or free movement of capital under Article 63 TFEU; and

—

order the Commission to pay the applicants’ costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicants rely on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicants’ freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

—

annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

—

alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU; and

—

order the Commission to pay the applicants’ costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicants rely on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicants’ freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

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annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

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alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicants’ freedom of establishment under Article 49 TFEU; and

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order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the group financing exemption scheme (‘the contested measure’) gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of its application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

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annul Commission Decision (EU) 2019/1352 of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption (OJ 2019 L 216, p. 1);

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alternatively, annul Article 2 of the contested decision to the extent that it infringes the applicant’s freedom of establishment under Article 49 TFEU; and

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order the Commission to pay the applicant’s costs.

1.

First plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in concluding that the contested measure gave rise to an economic advantage within the meaning and scope of Article 107(1) TFEU.

2.

Second plea in law, alleging that the Commission made an error of law and/or a manifest error of assessment in the identification of the reference system for the purposes of the ‘selectivity’ analysis.

3.

Third plea in law, alleging that the Commission made errors of law and manifest errors of assessment in wrongly or incompletely identifying, and in failing to understand correctly, the relevant objectives of its chosen reference system.

4.

Fourth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in identifying the contested measure as entailing a derogation from its chosen reference system.

5.

Fifth plea in law, alleging that the Commission made errors of law and/or manifest errors of assessment in wrongly classifying the contested measure as prima facie selective, by incorrectly holding that it entailed different treatment of undertakings in a legally and factually comparable situation.

6.

Sixth plea in law, alleging that the Commission made an error of law in taking account of Council Directive (EU) 2016/1164 (1) in its assessment of the selectivity of the contested measure, whereas that instrument did not come into force until after the end of the period in which the Commission ruled the contested measure to entail State aid.

7.

Seventh plea in law, alleging that the contested decision represents a misuse of power by the Commission contrary to the UK’s fiscal sovereignty.

8.

Eighth plea in law, alleging that the Commission made manifest errors of assessment in holding the alleged derogation to be not justified in relation to the taxation of non-trading finance profit(s) from qualifying loan relationships falling prima facie within section 371EB (‘UK activities’) of the Taxation (International and Other Provisions) Act 2010. In relation to the ‘qualifying resources’ and ‘matched interest profits’ exemptions, the Commission’s decision is also vitiated by its failure to state any reasons in relation to their justification or lack thereof.

9.

Ninth plea in law, alleging that the Commission acted in breach of Article 108(2) TFEU and Article 6 of Regulation (EU) 2015/1589 (2) and in breach of the duty of good administration under Article 41 of the Charter of Fundamental Rights. Specifically, it failed to indicate in its opening decision that it had concerns regarding the justification of the ‘75% exemption’ under section 371ID of the Taxation (International and Other Provisions) Act 2010 to avoid the practical difficulty of carrying out a significant people functions analysis in relation to intra-group lending activity, such as to give interested parties adequate opportunity to comment on this; it failed, in the course of its investigation, to invite any comments in this regard from interested parties; and in the contested decision it chose to ignore such comments as had in fact been provided by interested parties in this regard. In consequence, the contested decision is void.

10.

Tenth plea in law, alleging that the Commission erred in law in ruling that taxing a UK company on profits of foreign subsidiaries ‘to the extent attributable to domestic assets and activities’ does not pose a restriction to the freedom of establishment and that the contested measure is not needed to ensure compliance with the Treaty freedoms.

In support of their application (in the alternative) for annulment of Article 2 of the contested decision, the applicant relies on the following plea in law:

11.

Eleventh plea in law, alleging that even if (which is denied) the contested measure entailed a State aid scheme, the Commission made an error of law in holding that recovery of the aid would not infringe the fundamental principles of EU law, and in ordering recovery irrespective of whether the establishment of the CFCs and their making of loans to non-resident group companies in fact entailed an exercise of the freedom of establishment or the free movement of capital. Specifically, in the present case, recovery would infringe the applicant’s freedom of establishment under Article 49 TFEU and free movement of capital under Article 63 TFEU. To the extent of such infringement, the recovery order in Article 2 of the contested decision falls to be annulled.

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hold that there has been no unlawful State Aid, annul Article 1 of the contested decision C(2019) 2526 Final of 2 April 2019 on the state aid SA.44896 implemented by the United Kingdom concerning Controlled Foreign Company (CFC) Group Financing Exemption, to the extent that it finds that there has been unlawful State aid and set aside the requirement for the UK to recover alleged unlawful State aid received by the applicants in this context (Articles 2 and 3 of the contested decision);

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in the alternative, annul Articles 2 and 3 of the contested decision insofar as they require the UK to recover from the applicants the alleged State aid; and

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in any event, order the Commission to bear the costs incurred by the applicants for these proceedings.

1.

First plea in law, alleging that the Commission misunderstands the context, aim and operation of the UK CFC rules, with respect to the treatment of non-trading finance profits. The Commission’s conclusions in the contested decision are based on cumulative manifest errors. In particular, the Commission has made manifest errors in its understanding of the overall UK tax system, in its understanding of the aims of the CFC system, in the specific scope of the Group Financing Exemption and in the definition of qualifying loan relationships.

2.

Second plea in law, alleging that the Commission wrongly construes the Group Financing Exemption as a tax exemption and accordingly an advantage. In relation to non-trading finance profits, the Group Financing Exemption represents a charging provision and a part of the definition of the limits of the CFC rules, not a selective advantage. The Commission has provided no quantitative analysis to show that it is an advantage and, in the absence of cogent evidence that the measure in question results in an advantage, the contested decision cannot stand.

3.

Third plea in law, alleging that the Commission misidentified the reference system for the assessment of the effects of the CFC rules, and wrongly identified the CFC rules as a distinct set of rules from the overall UK corporation tax system. The Commission has not correctly understood the objective of the CFC rules and has failed to consider the UK’s margin for discretion.

4.

Fourth plea in law, alleging that the Commission has shown manifest errors in its State aid analysis and has applied the wrong tests when considering the question of comparability. The Commission failed to recognise the different level of risk to the UK tax base as between lending to a group entity which is taxable in the UK and lending to a group entity which is not taxable in the UK and irrationally concluded that intra-group lending is comparable to third-party lending.

5.

Fifth plea in law, alleging that, even assuming that the CFC measures in question prima facie constituted aid within the meaning of Article 107(1) TFEU, the contested decision wrongly concluded that there was no justification that could apply to defend the compatibility of the measures in question with EU State aid rules. In addition, the contested decision is irrational and inconsistent, in that the Commission has correctly accepted that Chapter 9 of Part 9A of the Taxation (International and Other Provisions) Act 2010 is justified in cases where the only reason for a CFC charge to apply under the counterfactual of Chapter 5 of the said Part 9A would be the ‘UK connected capital’ test, on the basis that that test may be excessively difficult to operate in practice, but at the same time, and without providing adequate reasoning, the Commission contends that the said Chapter 9 is never justified in cases where the significant people functions test would cause a CFC charge to apply under the said Chapter 5. In fact, the significant people functions test is excessively difficult to apply in practice, such that the Commission should have found the said Chapter 9 to be justified in the context of that test as well and, hence, it should have concluded that there is no State aid.

6.

Sixth plea in law, alleging that, were the contested decision to be upheld, enforcement of it through recovery of the alleged State aid from the applicants would infringe fundamental principles of EU law, including the freedom of establishment and the freedom to provide services, noting that, in the applicants’ case, the CFCs in question are situated in other Member States.

7.

Seventh plea in law, alleging that the recovery order resulting from the contested decision is unfounded and contrary to fundamental Union principles.

8.

Eighth plea in law, alleging that the Commission failed to provide adequate reasons for critical elements in the contested decision, such as the conclusion that the CFC charge under the said Chapter 5 could be applied using the significant people functions test without difficulty or disproportionate burden.

9.

Ninth plea in law, alleging that the contested decision also breaches the principle of good administration, which requires that the Commission allows transparency and predictability in its administrative procedures and renders its decisions within a reasonable time-frame. It is not reasonable for the Commission to take more than four years to issue its decision opening the investigation in the present case and to give a decision more than six years after the contested measure came into effect.

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annul the Commission decision of 2 April 2019 in its entirety, insofar as it concerns the applicant;

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alternatively, order that, in determining the amount of aid to be recovered, losses, reliefs or exemptions which were available to the applicant at the time when it claimed the Group Financing Exemption, or which would have been available to the applicant at that time had it not claimed the Group Financing Exemption, should in either case be taken into account even if access to those losses, reliefs or exemptions is now time barred under UK law, and irrespective of whether or not they are automatic;

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in any event, order the defendant to pay the applicant’s costs.

1.

First plea in law, alleging that the defendant has failed to establish that the Group Financing Exemption constitutes an advantage. The applicant argues that the defendant has failed to show that there is an advantage in each case where the Group Financing Exemption has been claimed.

2.

Second plea in law, alleging that there was no intervention by the State or through State resources. The Commission has failed to prove that claiming the Group Financing Exemption has certainly led to a reduction in the UK corporate tax liability.