The First Fiscal State Aid Wave

Abstract

Abstract This chapter analyses how the Commission started using State aid law as a tool against harmful tax competition in the early 2000s. It is divided into four parts. Section A introduces the key elements of the chapter. In Section B, the Commission’s relevant decision-making practice is scrutinized, mainly by focusing on five key Commission decisions and presenting their factual and legal background in order to demonstrate how effective State aid policy can be in the fight against harmful tax competition. In Section C, the Commission’s decisions’ common threads are identified and assessed. Finally, in Section D, the landmark Gibraltar case of the ECJ is used to argue that the evolution of the selectivity condition has had the effect of making it extremely difficult for Member States to enact or preserve harmful tax measures.