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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Ramondin & Ramondin Capsulas v Commission (State aid) [2004] EUECJ C-186/02 (11 November 2004) URL: https://www.bailii.org/eu/cases/EUECJ/2004/C18602_P.html Cite as: [2004] EUECJ C-186/2, [2004] EUECJ C-186/02, [2005] 1 CMLR 32, [2004] ECR I-10653 |
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JUDGMENT OF THE COURT (Second Chamber)
11 November 2004 (1)
(Appeal - State aid - Tax measures - Misuse of powers - Statement of reasons - New pleas in law)
In Joined Cases C-186/02 P and C-188/02 P,TWO APPEALS under Article 49 of the EC Statute of the Court of Justice, lodged on 15 and 16 May 2002, Ramondín SA, established in Logroño (Spain),andRamondín Cápsulas SA, established in Laguardia (Spain),represented by J. Lazcano-Iturburu Ayestaran, abogado,appellants in Case C-186/02 P,
Territorio Histórico de Álava - Diputación Foral de Álava, represented by A. Creus Carreras, B. Uriarte Valiente and M. Bravo-Ferrer Delgado, abogados,appellant in Case C-'188/02 P,
the other parties to the proceedings being:Commission of the European Communities, represented by F. Santaolalla Gadea and J.L. Buendía Sierra, acting as Agents, with an address for service in Luxembourg,defendant at first instance,
supported byComunidad Autónoma de La Rioja, represented by J.M. Criado Gámez, abogado,intervener in the appeals,
THE COURT (Second Chamber),
after hearing the Opinion of the Advocate General at the sitting on 6 May 2004,
gives the following
The tax credit of 45%
-Investments in new fixed assets made between 1 January 1995 and 31 December 1995, which exceed ESP 2 500 million, in accordance with the Diputación Foral de Álava agreement, will receive a tax credit of 45% of the cost of investment determined by the Diputación Foral de Álava, to be applied to the definitive amount of tax payable.Any tax credit not used up because it exceeds the amount of tax liability may be applied in the nine years following the year during which the Diputación Foral de Álava agreement was concluded. The Diputación Foral de Álava agreement will lay down the time-limits, and any restrictions applicable in each case. The advantages granted under this provision will be incompatible with any other tax advantage in respect of the same investments. The Diputación Foral de Álava will also determine the length of the investment process, which may include investments made during the preparation of the project which is at the root of the investments.-
Reduction of the basis of assessment to corporation tax
-1. Companies starting their business activity shall be entitled to a reduction of 99%, 75%, 50% and 25% respectively in the positive basis of assessment deriving from their economic activity, before this is offset by any negative bases of assessment arising in previous periods, for the four consecutive tax periods running from the first period in which, within four years of starting their business activity, they generate a positive basis of assessment. ...2. To qualify for this reduction, businesses shall fulfil the following conditions: (a) They shall start their business activity with a minimum paid-up capital of ESP 20 million;
...
(d) The new activity shall not have been carried on previously, either directly or indirectly, under different ownership; (e) The new business activity shall be performed on premises or in an establishment where no other activity is carried on by any natural or legal person; (f) They shall during the first two years of their activity invest at least ESP 80 million in tangible fixed assets, all of which assets shall be assigned to the activity and shall not be hired out or transferred for use by third parties. For the purposes of this requirement, goods acquired by leasing shall also be deemed to be investments in tangible fixed assets, provided that the business undertakes to exercise the purchase option; (g) They shall create at least 10 jobs within six months of starting their business activity and shall maintain the annual average workforce at that level from that point and until the year in which their entitlement to the reduction in the basis of assessment expires;...
(i) They shall have a business plan covering a period of at least five years. ... 4. The minimum amount of investment referred to in subparagraph (f) and the minimum number of jobs created referred to in subparagraph (g) of paragraph 2 above shall be incompatible with any other tax concession established for the same investment or job creation. 5. The reduction provided for in this Article shall be requested by means of an application lodged with the tax administration, which, after checking that the initial requirements are satisfied, shall where appropriate notify the applicant company of its provisional authorisation, to be formally adopted by decision of the Álava Provincial Council.--
- dismissed the applications; - ordered the applicants to pay the costs.
- granted the Comunidad Autónoma de La Rioja leave to intervene in support of the forms of order sought by the Commission; - dismissed the applications of the Gobierno Foral de Navarra (Government of Navarra) to intervene in support of the forms of order sought by the appellants.
- set aside the judgment under appeal; - annul the contested decision in so far as it (i) declares incompatible with the common market the tax aid provided for by Normas Forales 22/1994 and 24/1996 and (ii) orders the Kingdom of Spain to recover the aid; - order the Commission to pay the costs.
- set aside the judgment under appeal; - give judgment itself in the matter and annul the contested decision in so far as it concerns the tax credit of 45% and the reduction in the basis of assessment to corporation tax; - in the alternative, refer the case back to the Court of First Instance; - order the Commission to pay the costs of the proceedings at first instance and those of the proceedings on appeal.
- dismiss the appeals; - order the appellants to pay the costs.
- dismiss the appeals; - order the appellants to pay the costs.
- the Comunidad Autónoma de La Rioja did not have standing to complain to the Commission; - incorrect categorisation of the impugned fiscal measures as State aid incompatible with the common market; - an error of law on the part of the Court of First Instance in failing to make a finding of misuse of powers on the part of the Commission; - an error of law on the part of the Court of First Instance in failing to find an infringement of the principle of equal treatment.
- incorrect categorisation of the impugned fiscal measures as State aid incompatible with the common market; - failure to state the grounds of the judgment under appeal on that point; - an error of law on the part of the Court of First Instance in holding that the impugned measures were not existing aid; - failure to state the grounds of the judgment under appeal on that point; - an error of law on the part of the Court of First Instance in failing to make a finding of misuse of powers on the part of the Commission; - failure to state the grounds of the judgment under appeal on that point.
- maintaining in part the first and second grounds of appeal alleging, respectively, incorrect categorisation of the impugned fiscal measures as State aid incompatible with the common market and failure to state the grounds of the judgment under appeal on that point; - maintaining its fifth and sixth grounds of appeal, alleging respectively, misuse of powers and failure to state the grounds of the judgment under appeal on that point; - withdrawing its other grounds of appeal.
The grounds of appeal alleging, first, an error of law on the part of the Court of First Instance in failing to make a finding of misuse of power and, second, failure to state the grounds of the judgment under appeal on that pointArguments of the parties
Findings of the Court
- at paragraph 85, that all the applicants- arguments were based on speculation regarding possible underlying reasons for the contested decision and that they had not even shown that any harmonisation had in fact been achieved at Community level by the contested decision; - at paragraph 86, that the Territorio Histórico de Álava referred to the cases which gave rise to the order of the President of the Court of Justice of 16 February 2000 in Joined Cases C-400/97 to C-'402/97 Juntas Generales de Guipúzcoa and Others [2000] ECR I-1073, cases in which the Commission, in the applicant-s submission, undermined the legislative capacity of the Basque authorities in the field of taxation in finding that the Normas Forales constituted State aid since they were applicable exclusively to a particular area of a Member State; - at paragraph 87, that the last-mentioned argument had to be rejected, since in the contested decision the Commission had not taken the criterion of regional selectivity as a basis for establishing that the tax advantages from which Ramondín benefited constituted State aid falling within the scope of Article 92 of the EC Treaty (now, after amendment, Article 87 EC).
The grounds of appeal whereby the Territorio Histórico de Álava alleges, first, incorrect categorisation of the impugned tax measures as State aid incompatible with the common market and, second, failure to state the grounds of the judgment under appeal on that pointArguments of the parties
Findings of the Court
- the impugned tax measures are precluded as such from the scope of the law on State aid; - Article 92 of the Treaty has applied to the provisions of tax law only since the conclusions of the Ecofin Council meeting on 1 December 1997 concerning tax policy and the Commission notice of 10 December 1998 on the application of the State aid rules to measures relating to direct business taxation.
1 - Language of the case: Spanish.