In joined cases T-363/19 (UK v Commission) and T-456/19 (ITV v Commission), the General Court of the EU has dismissed the applications for annulment of the Commission’s April 2019 decision which found that the group finance exemption (GFE) from the UK’s controlled foreign companies (CFC) rules constituted unlawful state aid where the activities involved in managing the financing activities (and therefore generating the income) were located in the UK.
The General Court held that the Commission did not make an error of assessment in considering that the rules applicable to UK CFCs constituted a separate body of tax rules within the general UK corporation tax system. The court also found that the Commission was not wrong to conclude that the rules conferred an advantage in the sense that they introduced different treatment between taxable companies in a comparable situation. (See page 6 for more detail.)
In joined cases T-363/19 (UK v Commission) and T-456/19 (ITV v Commission), the General Court of the EU has dismissed the applications for annulment of the Commission’s April 2019 decision which found that the group finance exemption (GFE) from the UK’s controlled foreign companies (CFC) rules constituted unlawful state aid where the activities involved in managing the financing activities (and therefore generating the income) were located in the UK.
The General Court held that the Commission did not make an error of assessment in considering that the rules applicable to UK CFCs constituted a separate body of tax rules within the general UK corporation tax system. The court also found that the Commission was not wrong to conclude that the rules conferred an advantage in the sense that they introduced different treatment between taxable companies in a comparable situation. (See page 6 for more detail.)
