The Commission’s Approach in State Aid Assessment of Advance Pricing Agreements: an Autonomous EU Arm’s Length Principle and Its Implications

Sammanfattning: This thesis aims to reveal whether the Commission’s approach in the State aid assessment of advance pricing agreements (APAs) is in line with the current EU law framework and whether, given its implications, it is a sensible development in State aid law applied to taxation. Chapter 2 introduces the background of the arm's length principle, looking into its origin, purpose and application in tax law. Next, the fundamentals of State aid regime and its relevance to taxation are discussed in Chapter 3. Following the basics of State aid rules, Chapter 4 examines and summarizes the Commission’s recent practice of State aid assessment of APAs endorsing transfer prices granted to MNEs by Member States. As some of the Commission’s decisions have already been reviewed by the General Court, the relevant rulings are analyzed in Chapter 5. The application of the ALP has also been assessed by the CJEU under internal market law, so Chapter 6 considers how the CJEU treats the ALP and what rules and requirements it has established. Chapter 7 analyzes the Commission’s approach against other frameworks considered in the previous chapters to conclude why the Commission’s interpretation of State aid rules in the recent cases is problematic and what legal and practical issues it might raise for Member States and MNEs.