The Court of Justice of the European Union (CJEU) ruled in favour for a final and definitive appeal of the UK in a dispute with the bloc over state aid.
The dispute started in 2019 when the European Commission claimed that a tax scheme promoted under the UK’s Controlled Foreign Company (CFC) scheme gave an unfair advantage to foreign companies setting up their headquarters in the UK or local companies remaining after Brexit. The scheme was promoted when the UK was still a member states of the European Union before Brexit was finalised. The Commission was asking millions of euros in fines for what it considered illegal state aid.
However, despite the push from outgoing EU antitrust chief Margrethe Vestager to crackdown tax schemes, the Luxembourg-based court ruled against the bloc. In a statement, the CJEU clarified that the Commission and the General Court of the EU “erred in law in finding that the rules applicable to CFCs constituted the appropriate reference framework for examining whether a selected advantage had been conferred.”
There were no companies named by the Commission as beneficiaries of the scheme. However, British companies BBA Aviation, Chemring, Daily Mail & General, Diageo, Euromoney, Inchcape, Meggitt, Smith & Nephew and WPP all mentioned the investigation on the issue in their accounts.
