On December 17, 2015 the General Court of the Court of Justice of the EU (EGC) issued its decision on the ‘Spanish tax lease system’ (STLS) case (joined cases T-cases T-515/13, Spain v Commission, and T-719/13, Lico Leasing, SA and Pequeños y Medianos Astilleros Sociedad de Reconversión, SA v Commission). The STLS was a shipbuilding financing arrangement (that is no longer in force) that included Spanish tax relief for the investors that provided the finance. The EGC annulled the decision of the European Commission that had qualified the STLS as state aid.


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). The financing arrangement that was typically coordinated by banks, involved intermediary vehicles known as Economic Interest Groups (EIGs) in which external investors participated. The arrangement generated Spanish tax benefits that, because the EIGs were transparent entities for Spanish tax purposes, accrued to the members of the EIGs.

By decision of July 17, 2013 the Commission took the view that certain tax measures associated with the STLS constituted illegal state aid and were partially incompatible with the internal market. The Commission considered that the beneficiaries of the State aid were both the EIGs and, because of the EIGs’ transparency, also their members. The decision required the state aid to be repaid by the members of the EIGs.

Decision of the EGC

The EGC considered, first of all that, that since the EIGs were transparent entities, only the investors, and not the EIGs themselves, benefited from the economic (tax) advantages resulting from the STLS.

The EGC went on to state that the economic advantages that the members of the EIGs benefited from were open, under the same conditions, to any market operator without distinction and, therefore, could not be considered as a selective measure. In this respect it was irrelevant that the benefits were only available to businesses making this kind of investment. The EGC also drew a distinction between the investors and the EIGs and held that the fact that the STLS may have benefited the EIGs’ activities was not relevant.

Finally, the EGC also considered that the Commission did not give sufficient grounds for its decision that the measures were likely to distort competition and affect trade between Member States.

This judgment can be appealed, on points of law only, before the Court of Justice of the EU.

Our comment

This decision is positive for Spanish taxpayers that have made use of the STLS tax benefits, albeit the decision may still be appealed. It is also interesting to note the analysis as regards the transparent intermediary investment vehicles. In the meantime it may be questioned to what extent this state aid procedure has negatively impacted the Spanish shipbuilding industry rather than, as contended by the Commission, distorting competition with other shipbuilders in the EU.

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