The EU General Court delivers two judgments providing guidance on the application of the arm’s length principle in the context of State aid investigations (Fiat / Starbucks)

THE GENERAL COURT'S JUDGEMENT IN FFT: A CRITIQUE* In its judgments on 24 September in the FFT and Starbucks cases [1], the EU General Court gave its first view on the European Commission’s tax ruling decisions. These decisions were novel and complex in that they sought to assess whether the tax treatment conferred by Luxembourg and the Netherlands to FFT and Starbucks for intergroup transactions amounted to State aid.It is highly important from a legal perspective that the General Court refused to reject the use of the arm’s length principle by the European Commission in its decisions. The principle implies that transactions between entities of the same corporate group must be treated in the same way as those between autonomous companies. The General Court even sought to reinforce this

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