July 25, 2018 / 9:49 AM / in a year

Top EU court tells lower tribunal to review EU ruling on Spanish ship aid scheme

FILE PHOTO: The main courtroom of the European Court of Justice is pictured in Luxembourg January 26, 2017. REUTERS/Francois Lenoir/File Photo

BRUSSELS (Reuters) - Europe’s top court told a lower tribunal on Wednesday to re-examine EU regulators’ ruling against a Spanish ship finance scheme, a judgment that could strengthen the EU’s hand in a crackdown on corporate tax avoidance.

The European Commission blocked the scheme in 2013, saying that it gave a selective advantage to companies in breach of the European Union’s state aid rules.

The scheme allowed shipping companies to get a 20-30 percent rebate on the price of vessels built by Spanish shipyards, to the disadvantage of shipyards in other EU countries. Spain and two companies subsequently challenged the EU ruling.

The Luxembourg-based General Court, Europe’s second highest, upheld the appeal in December 2015, prompting in turn an appeal by the EU competition enforcer.

Judges at the European Court of Justice (ECJ) cited several errors in the lower tribunal’s reasoning for setting aside the ruling. “The case is thus referred back to the General Court,” the ECJ said in its decision.

It said the tribunal incorrectly applied state aid rules, made an erroneous assumption on who the beneficiaries were and committed an error of law by saying that advantages granted to the participants were not selective.

“Ccntrary to what the General Court concluded, the Commission’s decision is not vitiated by a failure to state reasons or by contradictory reasoning,” the ECJ said.

The Commission’s clampdown on tax avoidance and sweetheart tax deals has resulted in orders to Ireland to recover up to 13 billion euros from iPhone maker Apple (AAPL.O), Luxembourg to recover back-taxes from Fiat Chrysler (FCHA.MI), Amazon (AMZN.O) and Engie (ENGIE.PA), and the Netherlands to claw back unpaid taxes from Starbucks (SBUX.O).

The case is C-128/16 P, Commission v Spain and others

Reporting by Foo Yun Chee; editing by Robert-Jan Bartunek; editing by Mark Heinrich

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