Members' Research Service By / April 7, 2015

Tax rulings and state aid – literature

Written by Veronika Kunz and Teresa Garcia Lopez The Special Committee of the European Parliament on Tax Rulings and Other…

© Marek / Fotolia
Written by Veronika Kunz and Teresa Garcia Lopez

The Special Committee of the European Parliament on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE) “will look into tax ruling practices […], but will also review the way the European Commission treats state aid in member states and the extent to which they are transparent about their tax rulings.

Tax rulings and state aid - literature
© Marek / Fotolia

The concept of tax rulings is one not necessarily known to the average citizen. The OECD glossary of tax terms defines an advance ruling as “a letter ruling, which is a written statement, issued to a taxpayer by tax authorities, that interprets and applies the tax law to a specific set of facts.

In its press release about specific transfer price arrangements of 11 June 2014 the European Commission went further and explained that “tax rulings as such are not problematic: they are comfort letters by tax authorities giving a specific company clarity on how its corporate tax will be calculated or on the use of special tax provisions. However, tax rulings may involve state aid within the meaning of EU rules if they are used to provide selective advantages to a specific company or group of companies.”

Special note should be taken of a statement from the 1998 Commission Notice on the application of the State aid rules to measures relating to direct business taxation, namely that “every decision by the administration that departs from the general tax rules and benefits individuals leads in principle to a presumption of State aid and must be analysed in detail.”

The collection of material below is intended as a supporting tool for following the topic of tax rulings.

More EPRS information:

EU Legislation

Legislative overview / General information

Direct taxation: Personal and company taxation / Fact Sheet on the European Union (European Parliament)

Competition policy / Fact Sheet on the European Union (European Parliament)

Taxation / Summaries of EU legislation (EUR-Lex)

Competition / Summaries of EU legislation (EUR-Lex)

Legislation in force

Decision on setting up a special committee on tax rulings and other measures similar in nature or effect, its powers, numerical strength and term of office / OEIL, 2015/2566(RSO)

Articles 107 and 108 of the Consolidated version of the Treaty on the Functioning of the European Union

Article 4 of the Consolidated version of the Treaty on European Union

Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (consolidated version, 20.08.2013)

Council Directive of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and taxation of insurance premiums (77/799/EEC) (consolidated version, 01.01.2007)

Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (consolidated version, 05.01.2015)

Legislation in preparation

Proposal for a Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation / COM(2015) 135 final, 18.3.2015

For further information, see Tax Transparency Package (EC, Transparency and the fight against tax avoidance).

EU Institutions

European Parliament

Report on the Annual tax report / Eva Kaili, Committee on Economic and Monetary Affairs, A8-0040/2015, 4 March 2015

Report on the Annual report on EU Competition Policy / Morten Messerschmidt, Committee on Economic and Monetary Affairs, A8-0019/2015, 4 February 2015

Call for a measurable and tangible commitment against tax evasion and tax avoidance in the EU / 2013/2963(RSP), 12 December 2013

European Commission

Company tax / Taxation and Customs Union

Activity reports in the tax field / Taxation and Customs Union

International organisations


Base Erosion and Profit Shifting / OECD, Centre for Tax Policy and Administration: Reports, related documents.

Research, NGOS

International Consortium of Investigative Journalists

Luxembourg Leaks Database

Tax Justice Europe

Letter from Tax Justice Europe to the European Commission, March 2015

Further reading

Articles and papers

Tax Havens: International Tax Avoidance and Evasion / Jane Gravelle, Congressional Research Service, 15 January 2015.

Advance Tax Rulings in Perspective: A Theoretical and Comparative Analysis / Benjamin Alarieet al., New Zealand Journal of Taxation Law and Policy 20(4) , 2014, pp. 362-389.

Lux Leaks: Revealing the Law, One Plain Brown Envelope at a Time / Allison Christians, Tax Notes International, Vol. 76, No. 12, 2014.

Resolving Legal Uncertainty: The Unfulfilled Promise of Advance Tax Rulings / Yehonatan Givati, Virginia Tax Review (2009).

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