My 15,000word article on the State aid tax ruling cases (forthcoming for a long time now) has finally been published in the April Issue of the Law Quarterly Review and is available on Westlaw.

In the article, I argue that the central issue in the cases is whether the tax authorities of Belgium, Gibraltar, Ireland, Luxembourg and the Netherlands misapplied the relevant tax laws. In turn, I suggest that this is the wrong starting point and instead the focus should be on, essentially, the propriety of the tax authorities actions. Whether a selective advantage has arisen then first depends upon whether the tax authority has acted in a way which would be considered unlawful as a matter of domestic administrative law. This shifts the focus away from figuring out correct transfer pricing or other complex tax calculations to matters that we are ultimately concerned with, such as whether the tax authority has deliberately colluded with a multinational in order to give it a tax break, or has had the wool pulled over its eyes, or has failed to follow its own processes to ensure parity of treatment between taxpayers and so on. Only once unlawfulness has been demonstrated do we then have to consider also whether there has been a misapplication of the law.

I make it clear in the article that this does not mean that the Commission should lose the tax ruling cases. Indeed, I apply this new approach to the Apple case and find reasons for thinking that the Revenue Commissioners breach Irish administrative law.

Instead the advantages of my approach lie in respecting the role that tax authorities play and providing a clear framework by which the Commission can then allocate its resources to investigating past tax rulings (rather than having it assume accidentally the role of a supranational tax authority). My approach also would allow the Commission to investigate not just those cases where a tax authority has positively provided favourable assurances to taxpayers but also where it has failed, without good reason, to properly investigate or challenge the tax returns of multinationals.

If you wish to receive a copy (but do not have access to the Law Quarterly Review on Westlaw), please email me at stephen.daly@kcl.ac.uk

A longer blog on the article has been published on the UK State aid Law Association’s blog.