EU Advocate General Opinion in Joined Cases C-555/22 P UK v EU Commission et alt., C-556/22 P ITV v Commission et alt., and C-564/22 P LSEGH (Luxembourg) and LSEGH (Italy) v Commission et alt.

Thursday, 11th April 2024

EU Advocate General Opinion in Joined Cases C-555/22 P United Kingdom v EU Commission and Others, C-556/22 P ITV v Commission and Others and C-564/22 P LSEGH (Luxembourg) and London Stock Exchange Group Holdings (Italy) v Commission and Others

(Competition – State aid)

By decision of 2 April 2019 (Commission Decision (EU) 2019/1352), the European Commission found that the United Kingdom had granted between 2013 and 2018 illegal state aid to certain multinational groups by means of tax advantages. Indeed, it

considered that the UK unduly exempted those groups from a tax scheme targeting tax avoidance.

According to the Commission, the UK’s Controlled Foreign Company (CFC) rules were aimed at preventing UK companies from using a subsidiary, based in a low or no tax jurisdiction, to avoid taxation in the UK. They allowed the UK tax authorities to reallocate all profits artificially diverted to an offshore subsidiary back to the UK parent company, where it could be taxed accordingly.

However, between 2013 and 2018, the CFC rules included an exemption for certain financing income (i.e. interest payments received from loans) of multinational groups active in the UK. The Commission considered part of this group financing exemption (GFE) as illegal tax advantage. It then ordered the UK to recover it from its beneficiaries.

The United Kingdom and the company ITV challenged the Commission decision before the General Court of the European Union. By judgment of 8 June 2022, the General Court dismissed their actions (T-363/19 and T-456/19).

The United Kingdom, ITV and two companies of the London Stock Exchange Group appealed to the Court of justice.

Background Documents C-555/22

Background Documents T-363/19

Background Documents T-456/19