 NPA is about pricing agreement, which is a deal with transfer pricing case, whereas A&R is about tax ruling that can't be inside any other ruling that can be made up of, for example, case participation that can be made up of all the high-end instances. When you see with a tax lawyer about the ruling, you'll always hear that the ruling is about mounting the uncertainty. And you'll always hear the taxpayers don't like uncertainty because otherwise they don't want to do investment. So, it's great if you can go for tax services, even though it is, and ask about the interpretation of the deal and cost. What is often forgotten is that, of course, tax rulings can also be used to give a good benefit to the tax payer. But maybe it would be interesting for the state to have investors investing in the Netherlands. Mainly, it would be interesting if Ireland made an apple building its office in Cork, in Ireland. So, while we are close to the deal, we make it on the one hand legal certainty, and on the other hand, maybe from the tax system as I said, it's important to keep in mind, most people working in the tax field consider a ruling is only about legal certainty. So, they don't see the first part of the issue. They simply look at the tax debt and the ruling concerning tax immigration and the law that we have in place. Why is this so interesting? It's topic, because today you all see the impact on the state or on this issue. And then we will see that granting a ruling in accordance with law, the number one rule below, so only, I'm going to be telling you now, but that's the end. Granting a ruling is also considered. The new law is also part of the relevant laws that should be taken into consideration. So, we have the national part, the legal part. Why is this so relevant? Well, it's important to know what I'm going to talk about here. When it comes to state aid law, in the case law of court of justice concerning legal representation, we can hear that in the new state aid, there's always a tandem of operation between states. And of course, if they have the same interest, and of course with rulings, yeah, that's also really, of course, a ruling is the uncertainty, that's basically what it is about the most of the cases. But of course, a ruling is also a very good instrument. You give it to the state, you give it to the government, so that is a different problem. It's important to keep in mind that what we have been doing here concerns the discretionary powers. We are just mistaken in what it's been about. Yeah, the legality of this ruling, by some of the more recent then, is from how bad it's true. It's like this here, we speak about the discretionary powers, the tax authorities, who need to have a look at that tax movement. And it's important to keep in mind that it's not completely new this state aid research of discretionary power. If we look, for example, of this case from Filius E. I think you should say oil, yeah, oil. And from 2012, that was a case about loss of production in Finland. And the tax authorities had to agree, had to concern the amount of loss that could be carried forward. Well, the question came up whether that tax was a problem of state. And there the conducts through the application of that system to calculate the losses can in principle consider to be selective if the authorities, when deciding on the application of that system, have only a degree of levitation limited by objective criteria, which are not related to the tax system established by the legislation in question. However, they have a broad consideration to determine the beneficiaries for the conventional use of this system, provided on the basis of criteria unrelated to the tax system. The exercise of that registration must be regarded as favoring on the taking of smaller profits. What you see there is that it is acceptable, it is understandable that discretionary power use that power in a way that they are bound by objective criteria, which are not related to the tax system established by the legislation itself. So granting that authorization of the losses should be based on criteria that are relevant as laid down in the law, but not simply you do what you like to do the tax. So this judgment already shows the basis of this topic. You could say, on the basis of this case, you could say, well, it's okay if you don't have properties that you need to have, proper rules in your legislation, which may clear the basis of watch factor, but the criteria are too strong for those of you. That's an example, a recent case, which is making clear that it's already a relevant issue. In the city practice of the European Commission, you see more cases concerning discretionary power of the tax authorities. An interesting one, which my colleague, Peter S, who is still being wrote an entire book, is the so-called Daniels case. It's a very complicated, extraordinary, bold case, finished, Daniels, and now we're going to have a bang, and the Dutch government agrees on a sale of the lease transaction, and to the end, it concerns the question of whether the losses that were there could be utilized with the help of the transaction, which is very simple. And there, as of 2000, the price of the lease, and everything is granted in accordance with the Dutch rule. So there are some problems where they look now, as doubts whether this was all possible. Was it not about the project of a sale, the reality of the object of the study, or the sale of the property? Yeah, that was the sale, that was part of the problem, but in the end it had to do with loss utilization, because they had a lot of unused losses, whether they could be absorbed in this particular case. And it was quite, at the borders of the moment, to put it that way, to apply this situation. And there it would be, which is a very far as they need, when it was not a sale. As I said, having a look at tax rulings is not something new, in the sense that the European Commission, in its 1998 notice, as you know then it was the first time that they gave a notice on how to apply the stay date rules in matters of direct taxation. That was in 1998, after the Code of Conduct, which we spoke about this morning, and there it was written that, of course, tax rules need to be interpreted. They cannot be ruled for discretionary treatment of undertaking their job, the decision of the administration that the parts from general tax rules to the benefit of individual entities are principal means to the production of a stay date. So let's even say that if you're stronger, if you only start with a different interpretation, there could already be problematic, and therefore should be analyzed in detail. Then as far as they completely interpretation of the rules, they do not realize it. And then in the end, you'll be in the road of... However, in the end, it should still be possible to make use of tax rulings to ground legal certainty to the tax pay. But there, already in 1998, it became clear that the European Commission was considering to have a look at it, and it was already considering that it could be a problem if even so strongly that it says that if the decision of the administration of the parts from the general tax rules to Mr. Presumption of aid, that was in 1998. In the meantime, we had an economic and financial crisis. In the meantime, it became clear that Hong Kong federal commission is making bigger and bigger problems. In the meantime, the European Commission started to have a more critical look on tax rulings. It started in 2013 to investigate all those big name cases. And what we see is that in 2016 they released the new notice on the notion of state aid with a lot of detail on fiscal state, on how to apply the state aid rules in matters of taxation. And there will also be an entire section dedicated to the problem of tax rulings. And there they do the other way around. In 1908, they started with the problem of tax rulings to give legal certainty. Here we see the first thing they said in paragraph 169, granting tax rulings to give legal certainty is acceptable. It's important also for business life to get legal certainty so that they can invest in the way that they find appropriate. But there are a few situations where they become quite strict. Tax rules confer the selection of dollars on their addresses, particularly that they distinguish three different situations. Situation one, the tax ruling misapplies national tax law and this results in a lower amount of tax. So here we speak about application of the law and when it's applied incorrectly, there will be a matter of a selective advantage. And if you look at the French state's GDS Suez, there they are in fact voting this argument, misapplication of the law. Questions are much less application. Do we need to go into contra-legum application or is it just a matter of not putting the lights that are acceptable? That's not so clear, I believe. That's one issue. The second one is that the ruling is not available to undertake similar legal and factual situations. The example that came in my mind, and I read this, is the case which became public after a lot of difficulties. There was a big company in the US called Valdeci and they wanted to open a park in Paris. They wanted the owner to publish in Europe. They went to the French authorities. We are Valdeci and we would like to open a park here in Paris. What can we do? In the end, they published a tax ruling, on a very favorable treatment for their park, the profits made by their park in Paris, that really affected the tax payers in France and to have their park within the Paris jurisdiction. And the other tax payers probably would not have had that. Here we see the element of granting benefits to the tax payers coming. Then the third one, the administration, applies a more favorable tax treatment compared to other tax payers in a similar fashion and legal situation. And that's what we are speaking about in most of those cases in certain transfer prices, where in the argument that, for example, Starbucks is allowed to reduce a certain transfer pricing methodology which gives a certain allocation of the profits. Whereas in fact, their profit allocation, their particular methodology, gave benefit to Starbucks because of other conditions that would have been the application of the complicated transaction and arrangement that they needed to fund. And that methodology was simply the price of the stable on the market instead of the complicated calculation with the help of the transaction on that margin methodology. So, and there, of course, we see the development of the old language of the new which they come back with later. Or that's in fact related to that and that's in fact in the ruling on indirect matters, I believe. That's the other thing they agree about. And interestingly, in 2016, another working paper of the European Commission, they say, well, we only consider problematic those tax rulings which are manifest errors. Tax rulings that are so clearly not in agreement with the arms length principle that we had to consider them as a selective advantage. And for example, that could be whether it's the proper documentation. So we have made a ruling and usually, as we all know, there has to be a lot of documentation for transfer pricing. But when such documentation is very limited and there's still the ruling, there is something wrong. There's some documentation and there's something wrong. So that's how the European Commission looks at it. And in this way, we are starting with those guidelines which again also rise to multiple interpretations. I can say how should we interpret those guidelines of the European Commission, especially because they have their own flesh. But what happened then is that they started to investigate a lot of tax rulings. And what happened was it is known that for a longer period they were already asking information from the states about tax rulings but in many cases it became public. For example, in the Apple case there was the hearing in the United States about how Apple was treated and their penetration of treatment and then the European Commission decided to initiate those investigations into those tax rulings. And what we see there is that if you look at those cases they all concern the taxation of multinational companies. They all concern tax payers with group companies with a lot of different interpretations and they were all thinking of course that's also big but what we see there is all the time that the European Commission considers of companies as a multinational group you have certain benefits that are not there but you are send alone tax payers. Well, in a university you don't necessarily need to learn that of course there are many differences between being a group company and being send alone company and therefore they deserve different treatment in tax payers. But of course it's also true that being a group of companies you have a lot of benefits that you accept profit rules in Belgium are made up of that you have as a multinational company you create benefits that you wouldn't be able to teach if you would be operating on your own and the question is those extra benefits where should they be taxed? How should they be taxed? And in all these cases we see that in fact the companies are in a way who have that need of tax at a low rate maybe or in other cases you do this here you know and you will be it seems to be targeting that particular problem and in fact our group companies are not so different from individual companies whereas legislation are challenging moreover we also see that in all these cases we see tax authorities blessing tax planning structures taxpayers take advantage of the fact that there is no harmonized tax system they make a structure which may be perfectly legal in all relative jurisdictions so nothing wrong with that but if you look at the big picture you may wonder is that desire even more you may wonder is it desirable that a state grants blessing to a ruling of which it is clear that the tax payer is in fact taking advantage of the difference that we have in fact that in this way states are in fact fueling tax competition they are getting in the competition and make the situation maybe even worse that's maybe what the European Commission is trying to challenge but we don't have a loop we see already a few final decisions of the European Commission in individual tax rulings there there are already Amazon and they also turn rulings as such in agreement between the tax payer and that state whereas in the Belgium case the excess profit exemption case it was not so much a particular ruling that was the system in such dealing with harmonies to those companies and then that system was such from selecting the harmonies and then in the end claim that it is 35 35 companies have included such a ruling and then we see that and the European Commission said that explicitly in this press release that they looked at transfer prices which do not reflect economic reality and that's for example in the Starter's case they looked at profit allocation and reflected in our reality that is about allocation and permanent establishment and inconsistent application of national law giving rise to discretionary double double taxation in other words like McDonald's case which is still pending a state this case Luxembourg dropped a tax ruling if it knows that the tax payer with the help of that ruling is taking benefit of the fact that the Luxembourg tax system and the US tax system gave a different presentation so that double taxation is well that's a very broad way and as I said in our new case we know about the rules in the US and we also know but it's also clear that they are restricting other cases whether that will result in formal presentations well I couldn't resist but I give it a time to be brief we know from now we have Frank Ikea we're going to have a look at that situation and then of course there's a decision that's how we know but I don't know that's why I'm quite sure that they are also considering other situations because they get claims from competitors as we know but mostly because they have asked all member states to give information about their rulings and that's, I think it's a problem which you are rightly observing we do not know enough and that's a problem for the people in the case of me they have already had a look at my case how should I think about that there is a certain secrecy I would say but there is a publication of the official term of the measure which has been notified that's true but we don't know whether they are against rulings that are before that and that's a problem well if we then have a look because I said I don't know but first of all we have to arm ourselves so the sufferings of the states make sure that the states can still do their role but the other way we are increasingly relying on international soft law and speaking about discretionary power for tax authorities as we always say transportation is number one there is almost no margin how should we interpret that margin when we have to consider when you say that the market is inherent to the normal moreover there are differences but the issue is that if we want to apply fiscal state of law to this national taxing system we see on the one hand that the state of law is still so clear there are still a lot of difficulties about the scope of fiscal state of law for example in the end when you have to consider a situation whether it's taking back everything falls down to the selectivity analysis which is still very clear so we do not know on purpose that when I think of the United States for example comparability group companies and independent companies fiscal doctrine always considers them different but maybe fiscal the state of law and the state of law that makes it difficult to apply at this moment should state of law become a tax competition this morning the European Commission has a lot of power to develop its own state policy and therefore we see that it's going step by step a little bit further in the application of state of law but how should we interpret that manifest errors which I was speaking about how should we know about them and in the end we see that the European Commission would go on like this when the watchdog overlooking the activities of all the national governments and national authorities and also the government and national authorities and it doesn't have its position to do so but it has legitimacy to do so especially when the criteria are still not so clear so with this I wanted to make it clear in order to speak about these sexual engaged we have to deal with many uncertainties which make it difficult for all European to apply anything in case you are asked if you have any questions please do ask I want to have a brief look at the pending cases we start with the Apple case Apple case is of course the most famous case also concerned with the base of 30 billion which means that we have put on an extra account like we spoke about this morning and the Apple case which was made in the decision of all of 2016 Ireland told us to recover the aid but interestingly in this case Ireland didn't do that they were particularly slow with the recovery and then we see that the European Commission brought that case already to the Court of Justice to ask to force Ireland to recover that aid so there will be a community to see how the European Commission can react if you do not take action as you are supposed to do and then of course before the general court Ireland started the case and also Apple did so they brought the case to the Court the general court to see whether the Court would agree with the decision of the European Commission and it's important I think from a substantive point of view that this case is clearly taking very aggressive tax planning although I don't like to use that word but what Apple did is that those excess profits they were not really put in a tax haven but in no way I think from a statement it was simply growing in the global without a particular presentation to a particular state because of an Irish law which has been revealed in the meantime but it shows that in this case the only disparities in the national tax law that Apple could make use of that situation at the same time I wonder where should Apple have been allocated then is it part of should Ireland be taxing it as commissioners today that they need to be somewhere else that's why the other one Starbucks well we already spoke about that this morning what is interesting to tell the city of productivity there are also two cases pending before the general report then the first commission and Starbucks themselves what is interesting to note is that since a few years the European Commission has got more power to investigate situations here they may use of that power because apparently they were not happy about the information that was given by the facts about how those prices were being determined and now they have the power to ask competitors about information about those prices and what happened in the decision that the European Commission is relying information from unknown competitors who give information about the price that they would be using in these particular cases that I mentioned there with the records stated in the skew of verses from the European Commission with the case in which the man tried to force the European Commission to give information about where that information came from who told them that the price of Starbucks and in the market were incompatible somebody unstole that well that's what I wanted to tell you because this man has to be the lawyer himself so he had a certain interest to guard this information probably there is no difficulty in trying to do that but I think it would have been a little bit more transparent if that was a little bit clear in that case but in the end the General Court dismissed his claims and stated that it's the right of the European Commission to make use of that anonymous information and get proper information from the members so I thought it was interesting to mention that particular issue well Fiat that concerns a case in Luxembourg I think for the sake of time I will really deal with that and then there and then finally in Belgium we already spoke about the interest in there Belgium should be covered by its recipients so it's not just one taxpayer but a lot consequently he would say that all these taxpayers would go to the General Court and find that the same because they are affected by it and they would have it most relatively too soon I heard that there would be 35 taxpayers and in cases it's not 35 so I think not all taxpayers have taken the opportunity to go to the General Court and we will see later that in my view that will affect their position in the National Court because if they don't know themselves by its court they cannot in National Court claim well I think it's going to be much too broad my legitimate expectation that I will be able to play so I think that's what to mention then as I told you I thought given the topic it's interesting to consider what arguments are being used concerning legitimate expectations and I have learned that I shouldn't put too much text because here I failed very much but it's mostly because of what I'm making at home you will be reading it and then you have an open view I will also not deal with all the slides that I have prepared it's just to give you an idea what we are speaking about if we start with Apple I just stand here so you can all read it a little bit better these are positions taken both Apple and Ireland and later I will show you what the European Commission reacted to get this simply comes from the decision paragraph 439 Ireland and Apple raised the argument that by opening the formal investigation procedure and calling into doubt 22 years later the state aid compliance of the two rulings commission has violated the principle of legal certainty according to Ireland rules, state aid rules must be predictable and the commission is not entitled to develop Illumina law by extending the boundaries of those rules in a novel way by reference to international developments like the OECD framework so that's the argument you are doing something completely new then it's important to know that Ireland in the 1980s did not apply the international arms length principle it did not apply the OECD transfer price in guidelines they were quite free in Ireland and the claim is made that by applying the arms length principle the commission is retrospectively imposing external reference framework that was not part of domestic Irish law Ireland had its own transfer pricing principles its own relatively relaxed ways of calculating intercompany prices and they say now suddenly they make use of those international guidelines which we never had how can you do that to place law until now it has always been the case that states are completely free given their sovereignty to develop their own taxing system and that functions as the benchmark so if you make a very beneficial treatment which applies to anything and everybody it's no selective stay date and here therefore they were also allowed to deviate from international norms and this is exactly the point which caused so much discussion because that was the way it was always applied and now suddenly the EU started to invoke international norms which deviated from those national norms and that caused a lot of consternation about whether that was applicable I can from a normative point of view I completely understand your position of always being considered yes but I think it's also important to emphasize that the commission used a very important and tricky position because in fact the commission so it is saying that the abstract principle is included in article 137 and therefore there cannot be mentioned because there is direct application see now we come back to that it is to the extent that it is proved that in article 177 there is actually an arms length which I think the commission does a decision it simply takes for granted that selectivity in a way or another is a guarantee that there is an arms length principle but it is not a given interpretation that proves that there is an arms length principle which is very much more specific than selectivity so the proof that the selectivity is contained an arms length principle is not given at all by the commission so the legal reason is that people can be correct but to the extent that it is proved that article 177 actually contains an arms length and further it must be proved that the arms length principle contained in article 177 is the same that the arms length principle contained in article 9 in the OECD and then I can accept that the guidelines are applied but this is not proved at all Ireland argues that the commission's retroactive application of today's principles means that Ireland is being held to a standard that Apple could not have anticipated when the rulings were issued so here again you see that there is a completely novel analysis those were the arguments that were being used well here a lot of information about what this commission in the end argues about the rule at point commission is responding to the fact that those rulings they were never notified to the commission or otherwise publicly available and the commission could only have learned the existence of those rulings when they were publicly disclosed so that argument doesn't fly so this morning they started immediately to investigate the situation but since those rulings were secret and nobody could have known before that maybe they were granting state aid to these rulings furthermore well then it says that as soon as they knew about it they took action so that's the last point and this one I thought I'd skip for the second because here we go to the legitimate expectations a member states whose authorities have granted aid in breach of article 183 may not plead legitimate expectations of a recipient to justify a failure to comply with the obligation to take the steps necessary to implement commission decision instructing it to recover the aid so here we see that if you didn't do anything as a member states you cannot invoke legitimate expectations anymore as we just spoke about this morning that the members they cannot incite legitimate expectations for the benefit indeed I'm sorry and then it says well, since Apple didn't do anything during those proceedings we cannot take into consideration the arguments which we will take a look at the arguments of Ireland as if they were arguments of Apple and they continue with novelty of the approach and then they say interestingly on the third point the commission identified tax rulings as fiscal measures capable of giving rise to state aid in its 1999 notice on the application of state aid rules as I explained before and therefore it's not something new a village tax payer could have known that tax rulings could be investigated ever since 1998 and therefore they cannot invoke these arguments well this was just to give you a bit of an overview of these arguments, I don't want to spend too much time on it if we don't see that in the end in the proceedings pending before the general court we see that those arguments are coming back Ireland is referring again to legitimate expectations and it also says that they are using a reference framework existing in 2010 the OCD Transpiration Diamonds whereas at the time the ruling was being concluded Ireland had its own legislation so they could never have expected that this argument was going to be taken and Apple also took that argument so we will see how the general court will eventually consider these arguments when it is deciding on the compatibility of those measures sorry mostly yes well then in the Starbucks case I already mentioned that this morning neither in the decision neither in the proceedings during the investigation of the commission but also not now in the pending case before the general court Starbucks made any claims concerning legitimate expectations you see that the European Commission writes only the NLB that's the Dutch Order of Tax Advisors they said something about legitimate expectations but they also couldn't say anything where those expectations were built on so the European Commission simply dismisses that argument and Starbucks doesn't rely on it anymore in the fiat case comparable arguments but there we also see and I want to come back to that a bit later they say that the EU Code of Conduct group which is determined to check half of tax practices has approved the ruling investment solution group so the Code of Conduct group is a group of regulated by the member state in the end by the council which checks whether there is half of tax competition in the very state and there was proof and now we can approve that ruling practice so we can rely on the fact that from state it was accepted therefore we have legitimate expectations that we can make that we can rely on this ruling that it was acceptable it cannot be more now because it would be that I will come back to a bit later the European Commission dismisses the argument very simply about the case here we see that references being made to that forum 187 case where references being made to that previous commission decisions on transfer pricing have led Belgium to believe that there can be no state aid if a member state adheres to the unflank principle considering that there is a harmonization so in that case the court of justice gave some kind of indication that the unflank principle would be acceptable and then they say well we make use of the unflank principle because in the end that was embedded in that excess profit rule in a way or another see what it is about and they say we can rely on that and then they also speak about the court of conduct also had a look at informal capital rulings which I understood were like a predecessor to that excess profit regime and they said well that was accepted by them and now claims later we start to like objections about our excess profit we see so we also claim that we could have the light on the fact that it would be no state aid and also there the european commission dismisses the claims and in our case is appended before the court for the general court then we should have a look whether those arguments are an example of success before the general court but here we I have made a little summary of what Karla discussed this morning a beneficiary can claim additional expectations but he must meet a few conditions there must be an assurance of plans, measures, compatibility with the internal market given by a new institution and not by a younger state even the most prudent and diligent market operator could not have been able to foresee the adverse of his or her legal situation and when we would make a comparison between public and private interest it would be clear that in this case the private interest weighs more heavily than the public interest and therefore legitimate expectations should be claimed what I want to do then is to research this first question about an assurance of measures, compatibility given by a new institution whether there is a previous approval by new institution whether there are positive decisions in equivalent cases whether there is a previous assessment of the European Commission or whether there is an understanding of the act of the European Commission because all of these can be situations that could give rise to this particular situation but can we say that there has to be a previous approval by new information so I would say that in all these cases there is no previous approval you could wonder in fact that was your question could we say that the approval by the council of the findings of the Code of Conduct would count as a previous approval of an EU institution because of course the council is also EU institution that is always made to be EU institution because in that forum under the December of the Belgian Commission which Carlos spoke about this morning the Court of Justice dismissed the argument I think he said that the council expresses an aspiration of a political nature and can therefore not produce legal effects from Carlos to the life of the Court so that is a bit strange to some extent I would say I do completely understand the different nature of the Code of Conduct and the more hard law of staying open I could imagine that also should be given by the council could really give this indication I don't know if you would agree I do get it but in the end it's very narrow to be approved by the European Commission to be EU institution or not any other institution I think it can depend in which role the council because for example the council has also the possibility it has some competence in terms of evaluating the compatibility of a certain nature of what kind of political of an act so it is taken if it is political or if it is not political you know the previous rule by the European Commission would there be positive decisions in equivalent cases this was important in for example the coordination case we spoke about this morning because there was this reference to the 1984 case and in fact in that period the European Commission decided on many other harmful texts like for example the Dutch 15-day article 15b there also reference was made to in 1984 that it came like the only grill of legitimate expectations that decision I would say that here in this case we cannot also find any equivalent decision which would give you assurance that such rulings would be acceptable I would find it hard you could only say in the past in the world this legitimate expectation that certain of these harmful text measures could be acceptable if they were not applied after the decision or something like that there would be a very difficult argument to make so I would say that this also won't apply so here we don't have anything could we say that a previous assessment by the European Commission could give you such an assurance points of course that we know very little about what you said before so if we don't know what they are doing it's very difficult to get any assurance that they have been already investigating my ruling that could have been acceptable or not so that would be difficult to the contrary if you see this as well we know from the past that they look into text rulings based upon 1998 notice and we know that it can be problematic if there is too much leeway for the text authorities which grants which gives the possibility to grant selective advantages and also in the past European Commission investigated harmful text practices so also here I find it difficult to see how this could give an assurance that it could be acceptable but please let me know if you see any other argument then could we say that's the final argument that could be raised that the European Commission never took proper action because they already put a number a little bit about such rulings but they never did anything about it and therefore they failed to act and therefore we would have an imminent expectation that the ruling would be acceptable as we saw this morning so on this particular point it's not so clear we have only one case where such inaction has been granted and of course we also know there is a rule that they were secret so how could the European Commission could have taken action that it would have just had an original time and it would have had these panamanic rules and law and all those legalized cases of perception but not the preface the time has changed and now it's not acceptable of course it's not so that is an argument to say even if we could argue that they did not take it because of a changed period of time maybe you could claim and I'm just trying to find arguments that could lead to the fact that there has been a failure to act maybe they did not approve individual rulings as such like the ruling between Starbucks and the Netherlands but they did know about the ruling practice they did know what rules were in place to grant a ruling so we know the rules of the rulings that's also what you reason in Dutch literature for example in the Netherlands in case the ruling practice becomes one under international pressure the European Commission could have known about that and therefore from the fact that they never really took action it would take the expectation that the individual ruling in Starbucks would have been acceptable I find it a difficult argument to make but you read it in literature people try to find a solution I don't know if you would agree with that and then the last question what should your prudent what should the most prudent diligent taxpayer do when you say that you have not defined age there it's an important point there is the alkan case which I will not explain in great detail but can we say in that case the court of justice actually attributes the responsibility of the state to notify age to the taxpayer so the taxpayer cannot rely on what you see again the merging of interest of the taxpayer and the state and it's not up to the taxpayer to claim that the state should have done something so he cannot build any confidence from that argument I will come back to that in a second because here maybe I don't see in the end a little bit of room to be a little bit less strict about legitimate expectations but of course what prudent taxpayer do when you have a ruling in this morning already discussed all you can do is ask information from the permissionary to understand whether or not the state age for the rest is not so much good do so maybe there there would be a failure to act but it's a difficult argument to make so here since it's accumulation and we need to have acted very prudent and diligent it's really difficult to make a claim because there is no assurance from you but if we then go to the second question and I will try oh no it works again but even the most prudent a very good one would not have been able to see the first state argument that we have to consider and well of course for a procedural point of view there is no need to discuss very long because we should have simply checked whether it was notified and said probably that way there is no new way there no, you could ask well should the state inform you therefore and maybe as a taxpayer you can tell your tax advisor that he should have told you better about a ruling but that doesn't really help here to claim any identification but that's more the lack of knowledge that still is there about the supply to the state what's very interesting question from a legal point of view about these ruling cases is that we should consider whether this argument could be extended a little bit and say well could a very prudent this is another word a very prudent a legal taxpayer has known that such a problem would exist in the future about these ruling cases so that's not so much a procedural point but more a successive point of view in fact this morning we also spoke about that how would you know that in the future the rules of state would be changing you see in the arguments made by for example Apple that the novelty of the legal analysis of the European Commission would better take into consideration it's a spark of obvious that the ruling system constitutes the state so how about that could we have expected if we are very diligent then this is going to happen also because the case level of the course of fiscal state is still in development still as I've said before so this should maybe here we grant an opportunity to the taxpayer to have an argument that it could have had a different expectation because we are doing something too new something too in development that's how I like to approach fixed problems first I want to understand why a restrictive approach towards legitimate expectations why is that? this morning we already spoke about that in the EU law with respect to state aid the interests of the taxpayer and state are expected to be the same and it's also the European Commission to create that and to look at that so therefore it cannot be that duo the state and the taxpayer can have a look at each other it should be perished with because they have a shared interest to block the recovery in the end and that's what we always tend to see that they try to help each other to block the recovery part has been cried in a way therefore they could also be said to have a shared interest to grant the aid if we sit and think of the case that Mercedes in Germany would be going bankrupt it's in the interest of Mercedes to get money from the German government and Germany is also having Mercedes continue to do activities in Germany and both of them there is this shared interest to give the aid therefore we should be extremely strict with regard to the different expectations because here they have the same views and if we then would apply that view towards the tax ruling cases we see in fact the problem coming back is because the very fact that Mercedes have shared interest explains by the public is worried about tax rulings because they could be ineffective to grant some benefits to the tax payers so I think for that reason maybe that argument shouldn't be changed because especially with regard to the rulings we see this special relationship coming back and that's exactly what we are trying to target here so maybe that would not be a way to extend it maybe then the argument that it should be the novel legal analysis that was unpredictable maybe that would be an argument to counter to counter legitimate expectations and there we see that as a businessman also a diligent businessman you are forward looking you look at what's going to happen and you cannot make the dates that this kind of development could have been and there it's interesting if I saw on the website that there would be a commission in which they explain all these cases they say the commission in the past has adopted on tax planning practices which provide residents in the ongoing investigations I think that's a little bit too much to play in my view of course there have been numerous decisions in harmful tax competition issues like coordination centers the Dutch prohibitions but to say that there are presidents in tax planning practices I have difficulties to agree with that and there it is again there is one case because in fact the Belgium in 487 days is quite a crucial case on a few things we have actually to counter and interestingly the European Commission counts on one particular paragraph of justice as the foundation for its EU arms land principle and I just want to read it to you in paragraph 95 there the court of justice says the Belgium special which we spoke about this morning should be compared with the ordinary tax system based on the difference between profits and outgoings of an undertaking carrying on its activities in commission and free competition that particular section is used by the court of the European Commission to say that the EU arms land principle and that the court of justice has already accepted that the rest of the principle and the court of justice has already accepted that there should be no different treatment for the EU rude companies and unrelated companies free competition with regard to the determination of the process I found that personally far stretched to count on that particular paragraph to build the entire basis of EU arms land principle we could say that it's a new policy which you cannot set in mind in that case foundation that therefore in fact it's not so completely novel we have the president of that case on which everything is built so this the last one Belgium is for the president whether that would be a president for the fact that the EU arms land principle and that therefore for taxpayers they could have known that there was no money to buy the EU and they had no little expectations I think that if we look at the issue we spoke about today about the little expectations this is really the only legal question that doesn't really matter as we've seen in court of justice the parents of taxpayers the argument is for the general court so we will need to be a ruling on that then we will see in the current very kind of strict implications there will be this maybe a little bit more I'm not the general court but I just wanted to share with you the argument and I think this is what we will see in the future as the procedural that is relevant in these three cases the other one is the substantive how we consider where we are on state aid but that's another question do you have any question because in the meantime it's already four o'clock so I think thanks for your attention briefly again on what could happen before National Court and I would like to think a little bit more about the calculation of the recovery amount how we should consider that I was just saying that a big part of what I was telling you to discuss now has in fact already been dealt with this morning about your time I'm sorry so well yeah I've already done it it's recording well we have seen if the recipient of aid feels that there are exceptional circumstances granting him legitimate expectations there are in fact two possibilities first one is to claim these at the U level so like we've seen you should go after the decision of the commission you go to the general court and then you even to the court of justice but also at the national level they play a role over there we should see that in fact you have two different legal we say moment legal problems because one concerns the application for the annulment of the negative decision to the European commission and the other one concerns the implementation of the recovery decisions by the national authority it's common to argue that there is of course article 16 of the council regulation concerning the general principles of union law that have to be taken into consideration by the European commission when it's making a decision we see also more and more because I think it's interesting there is more case law developing now at the general court because in the past for example the decision group case or COA case there really are cases where those agents go to the general court to plead for legitimate expectations and one of the reasons why this is quite recent maybe is that in the past there was a lot of uncertainty at which level those different expectations should be played there is in fact some case law the court of justice which suggests that it goes via national court all the time and that they should give an interpretation in accordance with the EU law in that way there was some uncertainty about that but as we see this morning that's not the case now there is the normal decision at the EU level and then you can go to a national court in the end to claim a moment of the implementation of the recovery decision and that's for example the case Karna spoke about this morning that's really the leading case commission versus Germany well since it's an EU concept it's still possible that you invoke national principles as you've seen this morning but in order to challenge the implementation of the recovery decision in the national court you have to consider that it's the EU concept so it should always be applied within the European context so you cannot simply apply a more extensive national principle because that would block the effective implementation of the recovery decisions now here we see another case in which this is being dealt with where it's also said that in case of doubt you should ask for preliminary ruling if we then, and I go a bit fast because Karna dealt with this already before if we would then look at our ruling case again what happens if a tax payer goes challenging the implementation of a very national law and wants to rely on this particular expectation claiming that the ruling is completely in accordance with national tax law and national it could count on the fact that it would be there would be legitimate expectations you see that this argument makes somewhere literature which of course this regards particularly EU claiming based on the EU institution and why is that then for a matter of fact again in this regard it has EU you see that in that case which is already quite an old one it says well we do have to regard national law and national principles on legitimate expectations but the interests of the community should be fully taken into account and therefore you cannot so everything could effectiveness of EU state aid law and in the end as we've seen national courts are in the best position to examine those exceptional circumstances but they should obtain a preliminary ruling from the court of justice in case the interpretation of exceptional circumstances is not clear enough so then you have to go to ask for the interpretation and that concerns then the validity of the recovery decision of the commission that's in fact what you are challenging then I think I'm going a little bit too fast however one important element to take into consideration because it should always be established whether the recovery decision has become definitive and it means that the addressing of the state between the aid recipients did not take proper action at EU level on the basis of the perspective of the court of justice you don't take the EU level you can also try to have the same effect via the national route again so if you are an interested party in those cases and you do not take action before the general court to try to obtain your general national court cannot help you anymore already at the EU level so there is no way to invoke your arguments anymore and what would happen then what does that imply for our cases which is the second point that I wrote down there I think that in the Belgian case as I said before there seems not all taxpayers went to the general court to claim the annulment of the decision of the European Commission regarding an excessive profit case those taxpayers who didn't take action they cannot rely on those they are simply out of the game I would say those who go to court do have still the possibility of loss then there is the case in the Netherlands where indeed you have seen that the decision to be passed but the taxpayer did not invoke the different expectations maybe because the lawyer said that makes no sense at all because she will never be able to obtain it the question is that's the first point that I raised there should we say that the EU institutions they should always get compliance with the general principle of EU so EU institutions does not claim to have immediate expectations before the general court that the general court in itself should always look at it because it needs to have a look at the regulation that the general principle should be taken into consideration I don't know I think there are good arguments to say that they should I would say that as a lawyer it's always safer to make arguments some people claim that they should on the basis of the fact there is no basis now I think it's still debated as far as I understood but it's better to be safe to be sorry and to take the arguments I can say yes and then there are Apple and the VAT where explicit references to claim to immediate expectations are there it will be dealt with anyway what may be better is that in the Apple period the Apple period concerns actually two taxpayers two companies but the recovery situation has two beneficiaries but it's also said that the Apple group should repay so the commission brought it there in fact the claim saying those two companies repay but if they are unable we made the group as a whole which would imply that one of the companies who are the told to repay should also protect their rights because if they would wait until the decision is to use the spine they are actually doing it something today to consider this is what I was planning to say about this issue at the national level we have any questions another issue that I want to raise with you concerns the calculation of the recovery because in the decision the recovery of the commission they can say very precisely you have to recover 200 million euros that's it or they can say well we give you implications how much you should be recovering and that's why for example in the target case the amount between 20 and 30 million but the authorities who are much better able to consider the effect on national tax law should make the exact calculation of the amount that should be repaid and I think that this is going to be the problem in the future because of course tax authorities would really try to make the calculation but I will show you there are ways to do so so the taxpayer will go to the court to claim that that calculation is not correct but should be there because for example the media set case is an important example there where the European Commission gave 5 main implications to the Italian authorities to calculate the amount of recovery and then it was up to them to calculate the exact amount and it was a very long proceeding and one of the things that was being cleared in the end by the law of justice is that if the national tax authorities of the national authorities in this case come to the conclusion that in the end the 8 grand is 0 and then it's 0 and then the European Commission should be cleared but of course that calculation that is 0 should be based on the instructions from the European Commission about this and there, there will be difficulties and actually this point has been raised by the ruling cases saying that Ireland, Belgium, Lucifer said that it's very difficult to quantify the amount of the aid that was granted in those cases but the European Commission shows no mercy there they say as regards to the least difficulty in quantifying aid this case we can speak by apple deals with a relatively straightforward situation where it is converged across the state of production in the sexual base and this is cooperation and productivity in determining the amount so good luck you can finish however I think there are some difficulties in general there is for example the question what happens if as a result of the change in the taxable amount in the country that we are dealing with so for example Netherlands recovers 20 million from Starbucks so the taxable place in Starbucks company in Holland is increased which will have the effect that the shallower they will just be accredited to avoid double taxation so the fact that there the amount is increased leads to accreditation in the other state should we take that into consideration well you say no but it could be argued that maybe it should and I think this is an issue that eventually you will find out before one of the courts because it should be clear it's in fact a comparable issue which we have the fundamental freedoms if we need to calculate whether you are treated worse to what extent should you need to account the credit in the other state that we are dealing with so it's a comparable issue and that makes it also for example the Netherlands is the taxable amount in the Netherlands for the tax base of the Starbucks company that results in economic normalization but then the other state should in fact afford the taxable base what should we do then is it that the state actually has this normalization in our state those matters should be speaking to each other and find a way for the various methods to release economic normalization and find solutions for that and I think there will be issues to deal with this another issue is such a monopoly will impact other let's call it disposition for example the calculation of the loss-carry form which is often another this position others can be disputed before courts that could have an effect so that will need to be considered how that relates to each other so there is a particular problem how to deal with economic normalization so the big difficulty how should we interpret that EU as land principle which is still not so clear how should national authorities deal with that but they try to make the calculation for example in the general the Dutch the general council giving advice on legitimate proposals and they say that there is still too much uncertainty on this topic and that we should be working on that so it's really a problem that will need to be considered and then the question is what can national courts do about the EU given the fact that they have to deal with those in case you will be in commission well this morning we already discussed this a little bit there is this idea that there should be cooperation in good faith between national courts and the European commission that's laid down for example in the new council or regulation on the state aid organization and there are some who now says that the European commission on the state aid organization they ask the commission to be transmitted to the commission in this conversation or there are big questions concerning the location of state aid so there are big opinions from the European commission and it's even in another document which mentioned the enforcement of state aid law by national courts and it specifically refers to the national court by asking the commission for opinion concerning the application of the rules and there it also particularly mentioned concerning calculation of the recovery so that would be a way to deal with the courts with the difficulty what will be the what should you be doing with that therefore in addition to the possibility that there is always the possibility to grant to ask a question to the court of justice on the interpretation of this issue and how to deal with the indications of the European commission and there is some case law where that possibility to ask a different question is highlighted by the court of justice so even though there is the possibility to ask the commission to ask a different question and that's also really a problem again that in ADS that is where the court of justice also was referring to that principle so for some of the CDS that was referred there it's really about asking questions to the European commission and there I wrote down here in paragraph 3032 and 36 of the judgment I mean so for example in the media set it's written thus where the national court entertains judges as difficult as regards the quantification of the amount of APD recovered it remains open to the complex commission for assistance in accordance with the general principle of the principle of cooperation with the state as it is laid down on the enforcement of the national court and then the lives of all the consideration the national court is bound by a position it is not bound by a position adopted by the institution for the court of the commission the execution of the position therefore nevertheless the principle of cooperation with the state the national court will say the same position to account I will not just put them aside I should take them into account but of course there is still a lot of room to interpret that particular issue a good conclusion for this session at my last slide if you can see them at home if you like I just wrote down a few other issues that I think could become relevant in the future from which taxpayer are we actually recovering also and that's what was written down also somewhere what if the taxpayer changed his name in the proceedings in the period of time first it was company X who got the name now you are the court which is that still the same then for the recovery how should we think about that what is the consequences for the next several years so with this ruling which has been valid until 2013 that is a general condition but the taxpayer is still applying in later years what should you do then is that then also a reason to stop proceedings well then the issue we spoke about already a lot before what should you do to request what can the taxpayer do if you want to be more sure about the tax return that should be done what happens when the tax inspector is making such a claim as we have seen in the recent questions about the growth of the tax inspector and now complaining from tax competitors well I don't think it's very likely that this is still a secret but I can imagine that maybe somebody will start complaining about the ruling that is being reached on by one of your competitors how to deal with that so this is something for our next conference I would think to speak about that thanks a lot for your attention and no trouble thank you