Gibraltar case, the European Union Commission refers the United Kingdom

Friday 19 Mar 2021 – 18:51

Gibraltar case, the European Union Commission refers the United Kingdom

Concessional tax regulations and agreements granted before Brexit

BRUSSELS, 19 March (askanews) – The European Commission today decided to refer the United Kingdom to the European Union’s Court of Justice for not fully recovering state aid that the EU executive considered illegal, amounting to about 100 million euros, granted in tax exemption at the expense of interest Royalties for Gibraltar. The case concerns events that occurred prior to the UK’s withdrawal from the European Union, when the group’s decisions and laws were still in force and binding on the British.

On December 19, 2018, the Commission declared the aid in question illegal: the Gibraltar Corporation’s tax exemption scheme for accrued benefits and royalties, applied between January 1, 2011, and June 30, 2013, and January 1. 2011 in a row and on December 31, 2013, in addition to five agreements (“provisions”) for subsidized tax systems granted to some multinationals between 2011 and 2013. As a result, the European Union Executive ordered the competent authorities in Gibraltar to take back The assistance granted by the beneficiaries, in order to eliminate distortion of competition that by April 23, 2019, four months after the official notification.

However, more than two years after the decision, the Gibraltar authorities have recovered only a portion of the illegal aid: four beneficiaries were identified subject to the reimbursement order, but the process was only completed by two of them, which is less than 20% of the total amount recovered. Help.

The payment remains pending to the multinational company, Mead Johnson Nutrition (the recipient of a tax ruling) and was only partially enforced by the Fossil Group (the beneficiary of the illegal aid program). The delay is due to the fact that the two companies have filed appeals in national courts against the Brussels decision, and the first is also before the European Court of Justice; However, the cancellation procedure does not suspend the obligation to recover the illegal aid (Article 278 of the European Union Labor Treaty).

The Commission therefore decided to refer the UK to the European Court of Justice for failing to implement the decision on the aid recovery (Article 108 (2) of the Treaty on the Functioning of the European Union). The EU Withdrawal Agreement clearly anticipates this possibility (Articles 87 and 95) regarding the non-implementation of Commission decisions adopted before December 31, 2020.

Loc / Int9