Direct taxation falls within the competences of the Member States but it has to be exercised in accordance with European union law. The court has clarified that very early on and today more than one third of non-crisis State aids are granted in from of fiscal State aid. The Commission issued a communication on how to apply State aid rules to fiscal State aid in 1998. This communication is still valid and will at some point be replaced by a notice on the notion of aid.
The assessment of state aids is based on 4 criteria and the most important one for fiscal aid is selectivity, meaning that measures may not only apply to a certain group of undertakings. To apply the criterion of selectivity, a reference framework must be defined to determine a group of companies in the same legal and factual situation. The comparison between undertakings is made within one Member State.
The past case law already disallowed advantages to multinational companies. DG COMP opened 15 investigations in 2001, most of them concluded negatively, dealing with issues quite similar to the ones we see in the recent rulings. The difference was that all those cases were dealing with schemes, which left the possibility of individual tax rulings.