Udviklingen i fortolkningen af selektivitetsbegrebet i TEUF art. 107, stk. 1, på skatteområdet

Cecilie Frandsen

Student thesis: Master thesis


The criteria of selectivity in art. 107 TFEU (1) has changed in its interpretation in the period from the Commission’s Notice in 1998 on the application of state aid rules to measures relating to direct business taxation, to todays Lux Leaks scandal, where several secret tax agreements between member states and multinational firms are revealed by ICIJ. In the European Union member states’ have national sovereignty to construct legislation in the field of direct taxation. Since many secret tax agreements in Lux Leaks are comprehended by the criteria of selectivity in art. 107 TFEU (1), it seems that the Commission intervenes in the national tax legislation and that the national sovereignty in this field has been compromised. To analyze the evolution of the selectivity term in art. 107 TFEU (1), this thesis uses case-law of the Court of Justice, where the change in its interpretation is observable in case-law concerning Gibraltar, C-106/09 P and C-107/09 P. The thesis reaches the legal conclusion that the selectivity term has been extended and therefore this is a benchmark for the economic perspective regarding member states incentives and behavior according to tax competition in the European Union. The thesis concludes that the extension of the selectivity term in case-law minimize member states incentives to tax competition. Therefore, the evolution has a positive effect on harmful tax competition, as it increases European welfare. Even though this is a good statement from an economic perspective, the legal perspective about the national sovereignty in the field of direct taxation is still debatable. With a legal competition perspective, the Commission uses art. 107 TFEU (1) as a legal base to catch entire national tax systems as state aid, but with a legal tax perspective there is no legal base that allows the Commission to intervene in member states national tax systems.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2017
Number of pages90