On May 2006 the Commission received several complaints against the Spanish Tax Lease System (‘the STLS’), principally from the shipbuilding sector in other Member States. Those complaints denounced the STLS for allowing maritime shipping companies to buy sea-going vessels built by Spanish shipyards at prices reduced by 20-30%, resulting in the loss of shipbuilding contracts for the complainants.

The STLS consisted of the financing, by means of a legal and financial structure, of the building of sea going vessels by shipyards (sellers) and their acquisition by maritime shipping companies (buyers) with a rebate on the price of the vessel.

The legal and financial structure was organised by a bank which acted as intermediary between the maritime shipping company and the shipyard. The bank interposed, in the sale of a vessel by a shipyard to a maritime shipping company, two intermediaries, namely a leasing company and an economic interest group (EIG). A leasing company was substituted for the maritime shipping company in the purchase of the vessel. The bank set up an EIG and sold its shares to investors who sought to obtain tax advantages (reduction in the tax base). The EIG undertook, in a leasing contract, to buy the vessel at a gross price passed on to the shipyard by the leasing company. The EIG later resold the vessel to the maritime shipping company, under a bareboat charter agreement with an option to purchase but, on the other hand, only received the net price which took into account the rebate agreed at the start with the maritime shipping company.

By decision of 17 July 2013 the Commission took the view that certain tax measures of which the STLS was composed constituted illegal state aid and were partially incompatible with the internal market. The Commission ordered the recovery of the aid only from the investors having benefitted from the advantages at issue.

Spain, Lico Leasing (a financial institution having invested in a certain number of EIGs which had participated in the STLS) and the Pequeños y Medianos Astilleros Sociedad de Reconversión (a company that co-operated with small and medium-sized shipyards in order to enable them appropriately to achieve their industrial objectives) applied to the General Court for an annulment of the Commission Decision.

By today’s judgment, the General Court reverses the Commission Decision. The General Court considers first of all that, in the absence of an economic advantage in favour of the EIGs, the Commission wrongly concluded that they had benefitted from a state aid, since only the investors had benefitted from the tax and economic advantages resulting from the STLS.

According to the General Court, the Commission was also wrong to declare that there was a selective advantage and, therefore, state aid in favour of the EIGs and investors. The Commission was wrong to hold that the investors had benefitted from a selective advantage by reason of their participation in a certain type of advantageous transaction and that the STLS conferred a selective advantage on investors in so far as the tax authorities authorised, on the basis of an alleged discretionary power only, ‘transactions under STLS intended to finance sea going vessels’ in which they participated.

The General Court also considered that the Commission did not give sufficient reasons for its finding that the measures at issue were likely to distort competition and affect trade between Member States.

NOTE: An appeal, limited to points of law only, may be brought before the Court of Justice against the decision of the General Court within two months of notification of the decision.