Recovery of Fiscal State Aid in Tax Ruling Cases and Principles of Legitimate Expectations and Legal Certainty

Abstract

This paper will shed a light on the application of legitimate expectations and legal certainty principles against recovery orders in tax ruling cases. Between 2014 and 2022, the European Commission's investigations and the decisions following these investigations in some member states' tax ruling practices caused a massive boom in European Union State Aid law literature. Apple, Fiat, and Starbucks cases are among the main scenarios in that storyline. Recoveries of fiscal state aid were ordered as unpaid taxes for up to ten years in the past in these cases. To illustrate, the recovery order was 13 billion euros for Apple and around 20-30 million euros for Fiat and Starbucks decisions. Most interestingly, pleading general principles of European Union law such as legitimate expectations and legal certainty principles against recovery orders did not succeed in opposing the estimations. Therefore, this paper will try to address the application of legitimate expectations and legal certainty principles against recovery orders. The main focus will be how these principles should be applied when it deals with the novel and unpredictable interpretations of European Union State Aid rules. To this end, the clear examples from the Apple, Fiat, and Starbucks tax ruling cases will be drawn. This paper will argue that legitimate expectations and legal certainty principles should not be applied in a restrictive way.