HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 235/26
EN
Official Journal of the European Union
10.9.2011
COMMISSION DECISION
of 26 January 2011
on State aid C 7/10 (ex CP 250/09 and NN 5/10) implemented by Germany — Scheme for the carry-
forward of tax losses in the case of restructuring of companies in difficulty (Sanierungsklausel)
(notified under document C(2011) 275)
(Only the German text is authentic)
(Text with EEA relevance)
(2011/527/EU)
THE EUROPEAN COMMISSION,
submitted further information on 2 July 2010. The
Commission did not receive any comments from
interested parties.
Having regard to the Treaty on European Union and to the
Treaty on the Functioning of the European Union, and in
particular the first subparagraph of Article 108(2) thereof ( 1 ),
2. DESCRIPTION OF THE MEASURE
Having regard to the Agreement on the European Economic
2.1. Background
Area, and in particular Article 62(1)(a) thereof,
(5) Corporate
taxation
in
Germany
is
based
mainly
on
the
Income Tax Act (Einkommensteuergesetz, hereinafter: EStG)
Having called on interested parties to submit their comments
and the KStG. §10d(2) EStG allows losses incurred in a
pursuant to the provisions cited above (
tax year to be carried forward, i.e. according to the

2 ),
ability-to-pay principle, taxable income in future tax
years may be reduced by setting off the losses up to a
Whereas:
maximum of EUR 1 million each year. Under §8(1) KStG,
this possibility to carry forward losses also applies to
entities subject to corporate income tax.
1. PROCEDURE
(1) By
letters
dated
5
August
2009
and
30
September
2009
the Commission asked Germany for information about
(6)
The possibility of carry-forward of losses resulted in trade
§8c Corporate Income Tax Act (Krperschaftsteuergesetz,
in empty-shell companies (Mantelgesellschaften), which had
hereinafter: KStG). The German authorities replied to
long ceased any economic activity but still retained losses
these requests by letters dated 20 August 2009 and
that had been carried forward.
5 November 2009. By decision of 24 February 2010,
the Commission opened the formal investigation
procedure in respect of the aid laid down in
Article 108(2) of the Treaty on the Functioning of the
(7) To
counteract
the
trade
in
empty-shell
companies,
in
European Union (TFEU).
1997 the German legislator restricted the possibility of
carrying forward losses by introducing in §8(4) KStG the
shell acquisition rule (Mantelkaufregelung). The rule
(2) The
Commission
decision
to
initiate
the
procedure
was
restricted loss carry-forward to those corporate entities
published in the Official Journal of the European Union ( 3 ).
that were legally and economically identical to the
The Commission invited interested parties to submit
entity that incurred the losses. The rule does not
comments.
contain a definition of ‘economically identical’, but
gives one negative and two positive examples:
(3) The
German
authorities
submitted
their
reply
by
letter
dated 9 April 2010.
(a) a corporate entity is not economically identical if
more than half of its shares are transferred and if
(4)
Two meetings with the German authorities were held in
the entity then continues its economic activity or
Brussels on 9 April 2010 and 3 June 2010. Germany
starts it again with predominantly new assets;
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
Treaty became Articles 107 and 108, respectively, of the Treaty on
the Functioning of the European Union (TFEU). The two sets of
(b) a corporate entity is economically identical, however,
provisions are, in substance, identical. For the purposes of this
if the injection of new assets is solely for the purpose
Decision, references to Articles 107 and 108 of the TFEU should
of restructuring the loss-making entity and if the
be understood where appropriate as references to Articles 87 and
activity which gave rise to the unrelieved loss carry-
88, respectively, of the EC Treaty.
( 2 ) OJ C 90, 8.4.2010, p. 8.
forward continues on a comparable scale for the
( 3 ) See footnote 2.
following five years;

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/27
(c) a corporate entity is also economically identical if,
2.2. The measure
rather than injecting new assets, the acquiring entity
covers the losses that have accrued at the loss-making
(13) In
June
2009
an
amendment
to
§8c
KStG
introduced
entity.
§8c(1a) KStG, under which loss carry-forward is still
possible where a company in difficulty is acquired for
the purpose of restructuring. This amendment formed
part of the Citizens’ Relief Act — Health Insurance
Fund (Bürgerentlastungsgesetz Krankenversicherung) ( 6 ). The
(8) The
last
two
examples
were
commonly
referred
to
as
the
new provision is again referred to as Sanierungsklausel
‘Sanierungsklausel’ (clause allowing for restructuring of
or new Sanierungsklausel in order to distinguish it from
companies in difficulty).
its predecessor §8(4) KStG. It creates an exception to the
limitation of tax loss carry-forward introduced with effect
from 1 January 2008 by §8c(1) KStG.
(9) §8(4)
KStG
was
repealed
with
effect
from
1
January
2008 by the Business Taxation Reform Act 2008 (Unter
nehmensteuerreformgesetz).
(14) Under
§8c(1a)
KStG,
a
corporate
entity
can
carry
forward
losses despite a change in its shareholding that is caught
by §8c(1) KStG provided the following requirements are
met:
(10) The
same
act
introduced
the
new
§8c(1)
KStG,
which
imposes much tighter restrictions than §8(4) KStG on
loss carry-forward in the case of changes in the share
holding of a corporate entity. Under the new rule:
(a) the acquisition serves the purpose of restructuring the
corporate entity ( 7 );
(a) unused losses are forfeited entirely if more than 50 %
of the share capital, membership rights, ownership
(b) the company is, or is likely to be, insolvent or over-
rights or voting rights is transferred to an acquirer;
indebted at the time of the acquisition ( 8 );
(b) if, within a period of five years, more than 25 % but
(c) the company’s fundamental business structures are
not more than 50 % of the share capital, membership
preserved, which requires:
rights, ownership rights or voting rights is trans
ferred, unused losses are forfeited on a pro rata basis.
— the corporate entity to honour an agreement
between management and works council
(11) Initially
the
new
rule
did
not
provide
any
exception
for
(Betriebsvereinbarung) on the preservation of jobs,
companies in the process of restructuring and at the
or
same time subject to a significant change in ownership.
— preservation of 80 % of the jobs (in terms of the
average annual wage bill) for the first five years
(12) According
to
the
explanatory
memorandum
adopted
by
following the acquisition, or
the German Parliament with the Business Taxation
Reform Act 2008, the purpose of replacing §8(4) KStG
by the new §8c(1) KStG was to simplify the rules (the
( 6 ) Gesetz zur verbesserten steuerlichen Berücksichtigung von Vorsorgeaufwen
dungen (Bürgerentlastungsgesetz Krankenversicherung), 16 June 2009,
explanatory memorandum states that the practical appli
BGBl. I No 43, p. 1959.
cation of §8(4) KStG had raised many difficult legal
( 7 ) Restructuring (Sanierung) is a measure to avoid or overcome
questions) and to better target abuse ( 4 ). The legislator
insolvency (Zahlungsunfhigkeit) or over-indebtedness (berschuldung).
was aware that the change meant that, in the case of a
Accordingly, eligibility is limited to companies that are, or are likely
restructuring of an undertaking in difficulty which
to be, insolvent or over-indebted when the change in shareholding
implied a change in ownership, carry-forward of losses
takes place.
(
would no longer be possible. This was regarded as

8 ) The terms ‘insolvency’, ‘risk of insolvency’ and ‘over-indebtedness’
are defined in German insolvency legislation (Insolvenzordnung, here
acceptable, however, since the tax authorities could
inafter: InsO). In particular, Insolvency (§ 17 InsO): the debtor is
waive tax debts in such a situation based on
deemed unable to meet due payment obligations. As a rule, a debtor
considerations of equity, even without explicit legislative
is presumed to be insolvent if it has ceased payments. Risk of
provision (
insolvency (§ 18 InsO): the debtor is deemed to be at risk of

5 ).
insolvency if it is unlikely to be able to meet its existing payment
obligations on the due date. Over-indebtedness (§ 19 InsO): the
( 4 ) Bundestagsdrucksache 16/4841, p. 74.
debtor is over-indebted where its assets no longer cover its
( 5 ) Bundestagsdrucksache 16/4841, p. 76, referring to a circular from the
existing liabilities; unless it is highly likely, given the circumstances,
Federal Ministry of Finance dated 27 March 2003; BStBl I, p. 240.
that the company will continue to exist.

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L 235/28
EN
Official Journal of the European Union
10.9.2011
— injections of significant business assets or write-
may of course merge part or all of its activities into the
off of debts which still have an economic value
acquired company and hence use the losses carried
within 12 months; business assets are significant
forward.
if they represent at least 25 % of the assets of the
previous financial year; any transfer back to the
acquiring entity within the first three years are
deducted;
2.3. Comparison between §8c(1a) KStG and §8(4)
KStG
(21) The
new
rule
in
§8c(1a)
KStG
differs
from
the
preceding
(d) the company does not change sector of activity
rule, the repealed §8(4) KStG, in one important aspect
during the five years following the acquisition;
which is crucial for the assessment for State aid purposes.
(e) the company had not ceased operation at the time of
(22) Under
§8c(1)
KStG,
a
company
forfeits
its
loss
carry-
the acquisition.
forward where more than half of the shares are trans
ferred, unless the Sanierungsklausel is applicable. Thus, the
general rule is the forfeiture of loss carry-forwards on
significant changes in ownership. The existing Sanie
(15) §8c(1a)
KStG
entered
into
force
on
10
July
2009
and
applies retroactively from 1 January 2008.
rungsklausel therefore is the exception to the general rule.

(16) Initially,
§8c(1a)
KStG
was
introduced
only
for
a
limited
(23) Under the earlier §8(4) KStG, the general rule was
time, until 31 December 2009. However, on
continuation of loss carry-forwards in the case of
22 December 2009, as part of the Economic Growth
significant changes in ownership, provided that the
Acceleration Act 2009 (Wachstumsbeschleunigungs
company was economically identical. This exception
gesetz) ( 9 ), the German Parliament adopted a provision
was intended to prevent abuse, for example in the
that deleted the corresponding sunset clause from the
form of trading in shell companies.
KStG.
3. THE OPENING DECISION
(17) It
should
be
noted
that
the
losses
carried
forward
can
be
offset only against the profits of the company that is
(24) By
letter dated 24 February 2010 the Commission
being restructured. The acquiring company cannot
informed Germany that it had decided to initiate the
offset the losses against its own profits.
procedure laid down in Article 108(2) TFEU in respect
of this measure.
(18) This holds true even if the acquiring company
consolidates its tax liabilities at group level since §15,
(25) In the opening decision, the Commission took the view
first sentence, number 1 KStG prohibits loss carry-
that §8c(1a) KStG differentiates between financially
forward if a controlled subsidiary company (Organge
sound loss-making companies and companies that are
sellschaft) forms part of an integrated group (Organ
(potentially) insolvent or over-indebted, by benefiting
schaft) ( 10 ).
only the latter. §8c(1a) KStG thus seemed to depart
from the system of reference, according to which both
types of companies would not be eligible for loss carry-
forward. The Commission therefore reached the
(19) However,
under
German
corporate
tax
law
such
losses
preliminary conclusion that the measure is selective and
are not forfeited; they are merely ‘frozen’ at the level of
constitutes State aid, since the preconditions of
the entity and may be used only once the company is no
Article 107(1) TFEU appeared to be fulfilled. Finally,
longer consolidated. There is no time limit for the carry-
the Commission expressed its doubts about the compati
forward of these ‘frozen’ losses.
bility of the measure with Article 107(3)(b) TFEU, as
interpreted by the Temporary Framework ( 11 ), and with
Article 107(3)(c), as interpreted by the Rescue and
Restructuring Guidelines
(
(20) The
acquiring
company
benefits
indirectly
from
§8c(1a)

12 ) and the Regional Aid
Guidelines (
KStG because, once the restructuring process has been

13 ).
successfully completed, the tax burden of the restructured
entity is reduced. Furthermore, the acquiring company
( 11 ) Communication from the Commission — Temporary Community
framework for State aid measures to support access to finance in
the current financial and economic crisis (OJ C 83, 7.4.2009, p. 1).
( 9 ) Gesetz zur Beschleunigung des Wirtschaftswachstums (Wachstums
( 12 ) Community guidelines on State aid for rescuing and restructuring
beschleunigungsgesetz), 22 December 2009 (BGBl I, p. 3950),
firms in difficulty (OJ C 244, 1.10.2004, p. 2).
Article 2(3)(b).
( 13 ) Guidelines on national regional aid for 2007-2013 (OJ C 54,
( 10 ) Losses at sub-group level, cf § 15 No 1 KStG.
4.3.2006, p. 13).

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/29
(26) The
decision
to
initiate
the
procedure
was
published
in
German authorities, a private creditor party to a long-
the Official Journal of the European Union ( 14 ). The
term contract would forego part of their future claims, if
Commission invited Germany and interested parties to
that enabled another undertaking to take over the debtor,
submit comments.
thus ensuring the continuation of the long-term contract.
(27) After the opening of the formal investigation procedure,
4.2. Absence of selectivity
the German Federal Ministry for Finance instructed the
tax authorities responsible for tax collection to cease
(31) Germany takes the view that §8c(1a) KStG is a general
applying §8c(1a) KStG until the Commission had
measure, since it may be used by all undertakings,
adopted a final decision in the case and to inform the
regardless of their region, sector and size. Germany
entities concerned that in the event of a negative final
points out that any undertaking could potentially find
decision by the Commission, State aid would have to be
itself in financial difficulties outside its control and be a
recovered (
candidate for application of the rule.

15 ).
4.
(32) The
German
authorities
note
that
the
Commission
itself
COMMENTS BY GERMANY
had taken the view, in its 1998 Notice on business
(28) Germany
takes
the
view
that
§8c(1a)
KStG
does
not
taxation, that, ‘provided that they apply without
constitute State aid, for three reasons:
distinction to all firms and to the production of all
goods’, tax measures of a purely technical nature, such
as rules on loss carry-overs, were not selective, and that
‘the fact that some firms or some sectors benefit more
(a) it complies with the private market creditor principle
than others from some of these tax measures does not
(see 4.1);
necessarily mean that they are caught by the competition
rules governing State aid’ ( 17 ).
(b) it is not selective (see 4.2);
(33) Germany
takes
the
view
that
these
considerations
were
of
particular importance for tax incentives for research and
development, but also for environmental protection,
(c) it is justified by the nature and the overall structure
training and employment. In the view of the German
of the German tax system (see 4.3).
authorities, tax rules that favour undertakings making
particular efforts in these areas are not selective, since
they are open to all undertakings, even if de facto they
(29) Germany further argues that the new Sanierungsklausel in
are of greater benefit to undertakings active in certain
§8c(1a) KStG corresponds in essence to the old Sanie
sectors than others. In Germany’s view, the same
rungsklausel in §8(4) KStG, which had never been
reasoning should also apply to tax rules that favour
criticised by the Commission (see 4.4) and that a
undertakings in difficulty which are acquired in order
number of other Member States had similar tax rules
to be restructured.
in place (see 4.5).
(34) Germany argues that the Court and the General Court
4.1. Compliance with the private market creditor
had accepted that a measure benefiting exclusively under
principle
takings in difficulty may, in principle, constitute a general
measure, which is not selective. In this context Germany
(30) This argument was put forward by the German
cites in the first instance DMT, where the Court held
authorities for the first time in their letter dated 2 July
with regard to a Belgian payment facility for under
2010. Germany claims that the private creditor principle
takings in difficulties that ( 18 ):
may be also invoked with respect to tax debts or quasi-
tax debts ( 16 ). The relationship of the German State
towards its taxpayers is argued to be comparable with
‘The French Government argues that payment facilities in
the relationship between a private creditor and a debtor,
relation to social security contributions do not constitute
which are linked by a long-term contract, such as a rent
State aid if they are granted in identical circumstances to
contract or an employment contract. In the view of the
any undertaking experiencing financial difficulties. That
would seem to be the case under the regime established
( 14 ) See footnote 2.
by the Belgian legislation. The Commission, however,
( 15 ) Circular from the Federal Ministry of Finance dated 30 April 2010
claims that the ONSS has a discretionary power in
addressed to the tax authorities of the Lnder (responsible
regard to the grant of payment facilities.
for tax collection): http://www.bundesfinanzministerium.de/DE/
BMF_Startseite/Aktuelles/BMF_Schreiben/Veroffentlichungen_zu_
Steuerarten/koerperschaftsteuer_umwandlungsteuerrecht/009.html
( 17 ) Commission notice on the application of the State aid rules to
( 16 ) Germany cites the following cases: Case C-276/02 Spain v
measures relating to direct business taxation (OJ C 384,
Commission [2004] ECR I-8091, paragraphs 15 and 26, and Case
10.12.1998, p. 3), recitals 13 and 14.
C-256/97 Déménagements-Manutention Transport SA (DMT) [1999]
( 18 ) Déménagements-Manutention Transport SA (DMT), cited above,
ECR I-3913, paragraphs 22 and 25.
recitals 26 to 28.

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L 235/30
EN
Official Journal of the European Union
10.9.2011
It follows from the wording of Article 92(1) of the Treaty
indebtedness, which are defined in the InsO and which
that general measures which do not favour only certain
provide grounds for the opening of insolvency
undertakings or the production of only certain goods do
procedures.
not fall within that provision. By contrast, where the
body granting financial assistance enjoys a degree of
latitude which enables it to choose the beneficiaries or
the conditions under which the financial assistance is
(38) On the question of selectivity, Germany concludes that
provided, that assistance cannot be considered to be
the Commission’s view would mean that any tax
general in nature (see, to that effect, Case C-241/94
reduction constituted State aid, even if it were generally
France v Commission [1996] ECR I-4551, paragraphs
applicable, and that such a position was in breach of the
23 and 24).
TFEU.
It is for the national court in the main proceedings to
determine whether the ONSS’s power to grant payment
4.3. Justification by the nature or overall structure
facilities is discretionary or not and, if it is not, to
of the tax system
establish whether the payment facilities granted by the
ONSS are general in nature or whether they favour
(39) Germany
asserts
that
the
exemption
created
by
§8c(1a)
certain undertakings.’
KStG is justified by the nature and overall structure of
the German corporate tax system. It claims that there is
an objective difference between undertakings in difficulty
which are in need of restructuring and other under
(35) Germany also cites HAMSA, where the Spanish
takings, and that this objective difference justifies
authorities had argued that a measure is not selective
different treatment of undertakings in difficulty which
because it applies to all undertakings in difficulty. On
are acquired in view of restructuring. The German
that point, the General Court held that ( 19 ):
authorities base their argument on three considerations.
‘In the present case, the argument relied on by the
applicant and the Kingdom of Spain to the effect that
(40) Firstly,
whereas
financially
sound
undertakings
have
a
the Spanish law of 26 July 1922 concerning suspension
choice between seeking finance on the capital markets
of payments institutes a general procedure, applicable to
and looking for an undertaking to acquire them, under
all companies in difficulty, cannot be accepted. Whilst it
takings in difficulty only have the latter option, as they
is true that the law does not have authority to apply
will not be able to raise debt on the capital market or
selectively in favour of certain categories of undertakings
obtain a bank loan. As a result, undertakings in difficulty
or sectors of activity, it must be remembered that the
will systematically forfeit the possibility of carrying
debt remissions criticised by the Commission do not
forward their losses, whereas healthy undertakings
flow automatically from the application of the law, but
always have the choice between debt financing and
from the discretionary decisions made by the public
looking for a buyer.
bodies in question. It is, moreover, settled case-law that
where the body granting financial assistance enjoys a
degree of latitude which enables it to choose the bene
ficiaries or the conditions under which the financial
(41) Secondly,
the ratio legis of §8c(1) KStG, i.e. preventing
assistance is provided, that assistance cannot be
trade in empty-shell companies with accumulated losses,
considered to be general in nature (Case
does not require the exclusion of loss carry-forward in
C-256/97 DM Transport [1999] ECR I-3913, paragraph
situations where the acquisition is for the purpose of
27).’
restructuring rather than simply tax optimisation.
Without the restriction of §8c(1a) KStG to acquisitions
of undertakings in financial difficulty in view of restruc
turing, i.e. if other acquisitions were also included, the
(36) The
German
authorities
argue
that,
unlike
the
measures
ratio legis could no longer be maintained.
in DMT and HAMSA, §8c(1a) KStG does not provide for
discretionary decisions by public bodies, but that its
application flows automatically from the law. Therefore,
applying the a contrario argument, §8c(1a) KStG is not
selective.
(42) Thirdly, the purpose of §8c(1) KStG is to ensure that the
sale price of stakes in undertakings is based solely on the
economic value of the undertaking and that the value of
accumulated losses for tax optimisation does not affect
(37) Germany
also
takes
the
view
that
§8c(1a)
KStG
forms
the sale price. In the case of the acquisition of an under
part of the body of rules under German insolvency law.
taking in difficulty in view of restructuring, however, the
In particular, the eligibility of an undertaking is based on
possible value of accumulated losses plays no particular
the notions of insolvency, risk of insolvency and over-
role. To substantiate this argument, Germany points out
that accountants do not attach any value, in commercial
( 19 ) Case T-152/99 Hijos de Andrés Molina SA (HAMSA) [2002] ECR
group accounts, to potential carried-forward losses of an
II-3049, paragraph 157.
ailing undertaking.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/31
(43) For these three reasons taken together, Germany
burden through loss carry-forward, Germany is foregoing
considers that, even if §8c(1a) KStG were prima facie
revenue, which constitutes State aid. Germany has
selective, it is in any event justified by the nature and
informed the Commission that implementation of the
overall structure of the German corporate tax system.
measure could lead to a tax revenue shortfall of
EUR 900 million every year. Since the measure implies
a loss of State resources, it is therefore granted through
State resources. The aid is granted by a law, and is
4.4. Link between new and old Sanierungsklausel
therefore imputable to the State.
(44) Germany
observes
that,
with
effect
from
1
January
2008,
§8c KStG replaced a similar rule that was repealed at the
same time, namely §8(4) KStG. Both rules pursue the
5.2. Selective advantage
same objective, i.e. the prevention of trade in empty-
shell companies with accumulated losses.
(51) In addition, the measure must confer a selective
advantage on the beneficiary. It is settled case-law that
the concept of aid covers not only positive benefits, but
also action which, in various forms, mitigates the charges
(45) Germany
notes
that
the
Commission
had
never
expressed
which are normally included in the budget of an under
any concerns with regard to §8(4) KStG, and that it
taking ( 20 ).
therefore appears that this rule did not constitute State
aid.
(52) Pursuant to §8c(1) KStG, certain changes in the
ownership structure of an undertaking mean the partial
(46) Germany
therefore
regards
the
Commission’s
position
in
or complete forfeiture of the possibility of carrying
this regard as incoherent.
forward past losses for tax purposes.
4.5. Similar rules in other tax systems
(53) §8c(1a)
KStG
creates
an
exception
to
that
rule
where
the
change in ownership concerns an undertaking in
(47) Germany has pointed out that many other Member
difficulty and takes place for the purpose of restructuring.
States have comparable rules to §8c(1a) KStG.

Examples are Austria, Belgium, Finland, Italy,
Luxembourg and the Netherlands. It notes that the
Commission has not taken any action under the State
(54) §8c(1a)
KStG
could
therefore
grant
a
selective
advantage
aid rules against these Member States, despite the great
to companies fulfilling those conditions, since it enables
similarities between the systems.
them to set off past losses against future profits for the
purpose of calculating their taxable income.
(48) In
relation
to
paragraph
34
of
the
opening
decision,
which sets out the action the Commission has taken
(55) As
explained
in
recital
28,
Germany
argues
that
§8c(1a)
with respect to the French system, Germany stresses
KStG does not constitute such a selective advantage, for
that the German system differs from the French system,
three reasons:
which is limited to certain sectors of the economy and
provides a complete exemption from corporate income
tax.
(a) §8c(1a) KStG complies with the private market
creditor principle (5.2.1);
5. ASSESSMENT OF THE MEASURE
(49) Article
107(1)
TFEU
lays
down
that
any
aid
granted
by
a
(b) §8c(1a) KStG is not prima facie selective (5.2.2);
Member State through State resources in any form what
soever, which distorts or threatens to distort competition
by favouring certain undertakings or the production of
certain goods and affects trade among Members States, is
(c) §8c(1a) KStG is justified by the nature and the overall
incompatible with the internal market.
structure of the German tax system (5.2.3).
5.1. State resources and imputability
(56) Germany
also
points
out
the
similarities
between
§8c(1a)
KStG and its predecessor, §8(4) KStG (see 5.2.4) and that
(50) A
measure
must
be
financed
through
State
resources,
and
other Member States have similar rules (see 5.2.5).
the use of State resources must be imputable to the State.
A loss of tax revenue is equivalent to consumption of
( 20 ) Joined Cases C-182/03 and C-217/03 Belgium (C-182/03) and
State resources in the form of fiscal expenditure. By
Forum 187 ASBL (C-217/03) v Commission [2006] ECR I-5479,
allowing companies to reduce their corporate tax
paragraphs 86-87.

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L 235/32
EN
Official Journal of the European Union
10.9.2011
5.2.1. Possible application of the private market creditor
(62) Fourthly,
the
Commission
observes
that
usually,
in
the
principle
event of insolvency, the debtor’s business is taken over
by another company. Since the State has a monopoly on
(57) Germany
argues
that
§8c(1a)
KStG
complies
with
the
taxation, it will be able to collect taxes from the other
private market creditor principle, because it corresponds
company. Therefore, a debtor that exits the market will
to the behaviour of a private market creditor engaged in
be replaced by another debtor. Contrary to a private
a long-term contract with a debtor.
market creditor, the concept of an existing customer’s
loyalty has no bearing on the decision of the State.
(58) The
Commission
considers
that
this
claim
is
ill-founded,
for several reasons. According to the case-law of the
(63) The Commission concludes that the private market
Court and the General Court, the private market
creditor principle is not applicable in this case because
creditor principle is applicable only if the State acts like
the State has acted using its prerogatives in the public
an economic operator, but not when it exercises its
policy remit, and not as an economic operator. Even if
prerogatives as a public authority (
the private market creditor principle were applicable in

21 ). In this case, the
State exercises its monopoly of taxation in its capacity as
this case, the Commission has shown that a private
a public authority.
creditor in a long-term contractual relationship, placed

in the same position as the State, would not have
adopted a measure comparable to §8c(1a) KStG.
(59) The
Commission
takes
the
view
that
the
case-law
cited
by Germany does not alter this assessment. §8c(1a) KStG
5.2.2. Prima facie selectivity
concerns the establishment of a tax debt, whereas the
facts that gave rise to the judgments of the Court in
(64) According to the case-law of the ECJ concerning the
Spain v Commission (
selectivity of a tax measure, Article 107(1) TFEU

22 ) and DMT ( 23 ) concerned
situations where the administration had the possibility
requires assessment of whether, under a particular
to waive existing tax debts. Therefore, the private
statutory scheme, a national measure is such as to
market creditor principle is not applicable in this case.
favour ‘certain undertakings or the production of
certain goods’ in comparison with others which, in the
light of the objective pursued by the scheme, are in a
comparable factual and legal situation ( 24 ).
(60) Secondly, even if it were applicable, which the
Commission disputes, the Commission notes that the
tax advantage is granted automatically, without a prior
(65) Consequently,
when
assessing
the
selectivity
of
a
tax
assessment of the total losses (which determine the
provision, the Commission must first determine the
maximum amount of the future tax reductions), the
general or ‘usual’ rules applicable to the field of
prospects of the beneficiary returning to viability, or
taxation concerned under the existing tax system
whether the debtor has strategic importance. A private
(‘system of reference’). It must then determine whether
market creditor would not provide, in their general terms
the measure is an exception to the system of reference by
and conditions, such an automatic waiver of future debts,
differentiating between economic operators who, in the
without knowing in advance the possible amount of the
light of the objective pursued by the tax system of the
waiver, the debtor’s financial prospects and its strategic
Member State concerned, are in a comparable factual and
importance.
legal situation.
5.2.2.1. S y s t e m o f r e f e r e n c e
(61) Thirdly,
the
Commission
notes
that,
contrary
to
a
long-
term contractual relationship, §8c(1a) KStG does not
(66) The Commission is of the opinion that the system of
concern a waiver for existing debts, but a reduction of
reference is the German corporate income tax system
possible future debts, which might arise once the debtor’s
in its present form, and in particular the rules on tax
financial health has been restored. In other words, when
loss carry-forward for companies subject to change in
the State allows the loss carry-forward, there are no
their shareholding, which are laid down in §8c(1)
outstanding debts.
KStG. As described above in recital 10, under this rule
( 21 ) Case T-196/04 Ryanair v Commission [2008] ECR II-3643,
( 24 ) Case C-143/99 Adria-Wien Pipeline [2001] ECR I-8365, paragraph
paragraphs 84-85; Case C-334/99 Germany v Commission [2003]
41; Case C-308/01 GIL Insurance and Others [2004] ECR I-4777,
ECR I-1139, paragraphs 133-134.
paragraph 68; Case C-172/03 Heiser [2005] ECR I-1627, paragraph
( 22 ) Cited above.
40; see also Commission Notice on the application of the State aid
( 23 ) Cited above.
rules to measures relating to direct business taxation.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/33
unused losses are forfeited entirely if more than 50 % of
(71) The Commission would point out first that the objective
the ownership rights are transferred to an acquirer; they
of the tax system must be established at the level of the
are forfeited pro rata if, within a period of five years,
system of reference rather than at the level of the
more than 25 % but less than 50 % of the ownership
exception ( 28 ). The objective of the corporate income
rights is transferred. The Commission therefore concludes
tax system is to generate revenue for the budget. The
that forfeiture of losses is the general rule, i.e. the system
question arises whether this objective is taken into
of reference, in the case of a change of ownership of a
account where companies unduly reduce their tax base
company.
by using loss carry-forwards from shell companies.
§8c(1) KStG is intended to prevent companies which
change ownership from carrying forward their losses.
This is clear from the explanatory memorandum to the
law which introduced §8c(1) KStG and repealed §8(4)
KStG ( 29 ). Therefore, all companies which change
(67) The
Commission
notes
that
it
had
already
used
§8c(1)
ownership are, in the light of the objective of the tax
KStG as a system of reference in a previous case ( 25 ).
system, in a comparable factual and legal situation.
There, the Commission declared incompatible with the
internal market an exception to §8c(1) KStG allowing
companies acquired by venture capital companies to
carry forward losses despite the change in ownership.
The reasoning developed in that decision also applies
to this case.
(72) The
Commission
points
out
that
only
companies
in
difficulty are eligible for the exception provided for by
§8c(1a) KStG. However, companies which are not
insolvent or over-indebted, or at risk thereof at the
time of acquisition, might also be loss-making, but are
not eligible for loss carry-forward.
5.2.2.2. D i f f e r e n t i a t i o n b e t w e e n c o m p a n i -
e s i n a c o m p a r a b l e f a c t u a l a n d
l e g a l s i t u a t i o n i n t h e l i g h t o f t h e
o b j e c t i v e o f t h e t a x s y s t e m
(73) The
Commission
therefore
concludes
that
§8c(1a)
KStG
(68) By
way
of
departure
from
the
reference
scenario,
§8c(1a)
KStG enables companies that are, or are at risk of being,
differentiates between loss-making companies that are
insolvent or over-indebted at the time of their acquisition
otherwise healthy and those that are insolvent or over-
for the purpose of restructuring to carry forward their
indebted, or at risk thereof, by benefiting the latter.
losses, provided that certain conditions are met (see
§8c(1a) KStG thus differentiates between companies
recital 14).
that are, with regard to the objective of the tax system,

in a comparable factual and legal situation.
(69) Germany argues that the objective of §8c(1a) KStG is to
(74) Secondly,
the
Commission
stresses
that,
contrary
to
the
remove a tax obstacle to the restructuring of under
German view, the case-law of the Court and the General
takings in difficulty. In the light of the objective of the
Court has never regarded a measure applicable to all
tax system, only undertakings in difficulty are in a
undertakings in difficulty and which does not leave any
comparable factual and legal situation. Since §8c(1a)
discretion to the public authorities as, by definition, not
KStG applies to all undertakings in difficulty, it is not
selective.
selective.
(75) With
regard
to DMT, it should be noted that, in response
(70) Germany takes the view that the judgments in DMT ( 26 )
to the observation by the French government, which
and HAMSA ( 27 ) support this position. Germany
corresponds to the view held by Germany in this case,
contends that the Court and the General Court
the Court concludes in recital 28 that even if the national
concluded that the measures in these cases were
authorities enjoyed no discretion, it was still for the
selective because they required discretionary decisions
national court to determine whether the national
by the public authorities. It follows a contrario from
measure in question was general in nature or selective.
these judgments that a measure applicable to all under
Thus, the Court recognises implicitly that a national
takings in difficulty, and which does not leave any
measures open to all undertakings in difficulty, and
discretion to the public authorities, is not selective.
which does not leave any discretion to the public
authorities, may still be selective.
( 25 ) Case C 2/2009 MoRaKG, Conditions for capital investments
(OJ L 6, 9.1.2010, p. 32).
( 28 ) Case T-55/99 CETM [2000] ECR II-3207, paragraph 53.
( 26 ) Cited above.
( 29 ) See Bundestagdrucksache 16/4841, p. 75 et seq. and description
( 27 ) Cited above.
above.

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L 235/34
EN
Official Journal of the European Union
10.9.2011
(76) With
regard
to HAMSA, the Commission observes that
itself which are necessary to achieve such objectives.
the obiter dictum in paragraph 157 refers to the general
Only the second mechanisms qualify for a justification
Spanish insolvency legislation. The measure at issue in
by the nature or the general scheme of the tax system of
HAMSA, however, was not a measure under insolvency
which it is part.
law, but a debt waiver granted by the Spanish authorities
on a voluntary basis, without there being any legal obli
gation, and which was much higher than the debt
waivers agreed by private investors. The case is
(84) The
Commission
considers
that
it
is
necessary
in
this
therefore not relevant to the assessment of the measure
case to distinguish between the objective of §8c(1)
in question.
KStG and the objective of §8c(1a) KStG.
(77) Advocate
General
Fennelly,
in
his
opinion
in Ecotrade,
(85) As
Germany
recognises
in
its
submissions,
the
objective
confirms that rules which are applicable to all under
of §8c(1) KStG is to prevent abuse of the loss carry-
takings in difficulty may be selective and constitute
forward allowed by the German tax system in the form
State aid ( 30 ).
of purchases of empty shell companies.
(78) Therefore,
contrary
to
the
position
of
Germany,
the
Commission’s analysis of the measure in question is in
(86) The
Commission
notes
in
this
respect
that
§8c(1)
KStG
line with the case-law of the Court and the General
has a much broader scope than its predecessor, §8(4)
Court.
KStG. Whereas the latter ruled out the carrying forward
of losses only when two cumulative conditions were met,
namely acquisition by another corporate entity and new
economic activity, the new provision does not contain
(79) The
Commission
therefore
considers
§8c
(1a)
KStG
to
be
the second condition. Acquisition by another corporate
prima facie selective.
entity is therefore enough to forfeit the possibility of loss
carry-forward. The legislator was aware of this difference
in scope since the explicit purpose of the change in
5.2.3. Justification on the basis of the nature or the general
legislation was to finance a reduction in the corporate
scheme of the tax system of which it is part
income tax rate from 25 % to 15 % ( 33 ).
(80) According to the case-law of the Court, a measure which,
although conferring an advantage on its recipient, is
justified by the nature or general scheme of the system
(87) §8c(1a)
KStG,
on
the
contrary,
is
not
intended
to
prevent
of which it is part, does not fulfil that condition of
abuse. That is clear from the explanatory memorandum
selectivity ( 31 ).
with the introduction of the new Sanierungsklausel
published by the German Parliament. The explanatory
memorandum states that §8c(1a) KStG was introduced
to tackle the global financial and economic crisis ( 34 ).
(81) Therefore,
where,
as
in
the
present
case,
the
Commission
During the crisis, the restrictions on loss carry-forward
comes to the conclusion that the measure in question
were perceived to be a particular obstacle to the restruc
prima facie appears to be selective, it must assess whether
turing of companies.
the differentiation is justified by the nature or general

scheme of the tax system of which it forms part.
(88) The
Commission
notes
that
Germany,
in
its
comments
(82) The
Commission
notes
that
it
is
settled
case-law
of
the
on the opening decision, stresses the fact that §8c(1a)
Court that it is for the Member State to provide such
KStG does not constitute an anti-abuse measure, but
justification ( 32 ).
was introduced to support ailing companies during the
financial and economic crisis.
(83) The
Court
has
further
clarified
that
a
distinction
must
be
made between, on the one hand, the objectives attributed
(89) The
Commission
concludes
that
the
objective
pursued
by
to a particular tax scheme which are extrinsic to it and,
this specific tax measure is extrinsic to the tax system.
on the other, the mechanisms inherent in the tax system
According to the case-law of the Court, the pursuit of
such an extrinsic objective cannot be relied upon to
( 30 ) Case C-200/97, opinion delivered on 16 July 1998, paragraphs
justify a measure by the nature and overall structure of
26-32.
the tax system ( 35 ). It can be analysed only in the
( 31 ) Case 173/73 Italy v Commission [1974] ECR 709, paragraph 33;
compatibility assessment.
Case C-75/97 Belgium v Commission [1999] ECR I-3671, paragraph
33; Adria-Wien Pipeline and Wietersdorfer & Peggauer Zementwerke,
cited above, paragraph 42; GIL Insurance, cited above, paragraph
( 33 ) Bundestagdrucksache 16/4841, p. 30 et seq.
72; Heiser, cited above, paragraph 43; Case C-148/04 Unicredito
( 34 ) Bundestagdrucksache. 16/13429, p. 50, and Bundestagdrucksache
Italiano [2005] ECR I-11137, paragraph 51; Case C-88/03
16/12674, p. 10.
Portugal v Commission [2006] ECR I-7115, paragraph 52.
( 35 ) Portugal v Commission, cited above, paragraph 82, which refers to
( 32 ) Portugal v Commission, cited above, paragraph 81.
‘cohesion’ and ‘regional development’ as extrinsic objectives.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/35
(90) The
three
arguments
presented
by
Germany
cannot
alter
of the ailing company, the Commission notes first that
this assessment.
this is based on accounting criteria and is therefore
irrelevant for tax considerations. Secondly, the
Commission notes that this argument contradicts
Germany’s statement that the inability to carry forward
losses constitutes an obstacle to restructuring. This is true
only if the acquiring company attributes a certain
(91) With
regards
to
Germany’s
argument
that
a
company
in
monetary value to the possibility of carrying forward
difficulty has no choice for but to obtain finance through
losses. Therefore, the Commission also rejects
an investor, whereas a healthy company, which is
Germany’s third argument.
temporarily loss-making, has the choice between
obtaining finance on the capital market and acquisition
by an investor with subsequent refinancing, the
Commission is of the opinion that the way a company
finances its business is irrelevant in the light of the
objective of the tax system. A corporate tax system is
based on the taxation of profits and the declaration of
(94) Moreover,
Germany
claims
that
other
Member
States
also
losses. As could be observed during the financial and
provide tax relief for the restructuring of companies, such
economic crisis, financially sound companies also
as the French aid scheme for the takeover of firms in
reported losses temporarily. But these financially sound
difficulty. The Commission cannot accept Germany’s
companies are not eligible for the loss carry-forward in
argument, which is based on a comparison. Firstly, in
application of the Sanierungsklausel and are thus at disad
order to justify a measure, the Member States may
vantage compared with ailing loss-making companies in
refer only to principles inherent to their tax system, as
the event of a change of ownership and subsequent refi
the system of reference by which to assess whether an
nancing by the new shareholders. Furthermore, the
undertaking obtains an advantage with the meaning of
Commission also notes that during the financial and
the State aid rules. The fact that comparable tax measures
economic crisis healthy companies, which temporarily
might exist in the other Member States is of no conse
recorded losses, had great difficulties accessing the
quence since any such measures could themselves be
capital markets. Therefore, even the factual assumptions
caught by the provisions in the Treaty. Secondly, the
underlying the first argument are inaccurate. The
conditions imposed on measures under the French
Commission therefore rejects Germany’s first argument.
scheme differ from §8c(1a) KStG. The French scheme
provides for a tax exemption for newly created
companies which take over a firm in difficulty. After
the scheme was declared incompatible within the
common market by the Commission in 2004, ( 36 )
France changed it to comply with the State aid rules.
(92) With regard to Germany’s second argument, that the
The benefits provided are now partly de minimis. The
exception provided in §8c(1a) KStG to the general
other part of the aid is compatible as regional aid or
prohibition on loss carry-forward in the event of a
SME aid. ( 37 )
change of ownership laid down by §8c(1) KStG was
justified by the ratio legis of §8c(1) KStG, because there
was no risk of abuse in the case of the restructuring of a
company in difficulty, the Commission observes that this
argument does not justify the restriction of §8c(1a) KStG
to companies in difficulty. The Commission points out
that there is no risk of abuse either when a financially
(95) The
Commission
therefore
concludes
from
the
above
sound company is acquired. The risk of abuse exists only
that the measure in question does not derive directly
in relation to empty-shell companies. As pointed out
from the basic principles of the tax system and is not
above, the ratio legis of §8c(1) KStG goes further than
justified by the nature and general scheme of the tax
combating abuse. Its objective is also to increase the
system.
German corporate tax base and to offset the reduction
in the corporate income tax rate from 25 % to 15 %.
This explains why §8c(1) KStG also includes a number
of acquisitions of interests where there is no risk of
abuse. The Commission therefore rejects Germany’s
argument that the exception introduced by §8c(1a)
KStG corresponds to the ratio legis of §8c(1) KStG.
5.2.4. The link between the old and new Sanierungsklausel
(96) Germany argues that §8c(1a) KStG essentially
corresponds to the old §8(4) KStG and that the
Commission had never considered §8(4) KStG to be
State aid.
(93) With regard to Germany’s third argument, that losses of
ailing companies are usually not attributed any value by
auditors when calculating deferred tax for consolidated
( 36 ) Case C 57/02 Tax exemption for the takeover of firms in difficulty
(OJ L 108, 16.4.2004, p. 38).
financial statements, and therefore the possibility of
( 37 ) Case N 553/04 Tax exemption for the takeover of firms in difficulty
carrying forward losses has no impact on the sale price
(OJ C 242, 1.10.2005, p. 5).

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L 235/36
EN
Official Journal of the European Union
10.9.2011
(97) The Commission points out that Germany never notified
(104) The Commission observes that, according to the
§8(4) KStG. The Commission has therefore not yet taken
information provided by Germany, all undertakings
a view on whether it involved State aid.
eligible for the measure are eligible for insolvency
proceedings under German insolvency law (see recital
14 and footnote 7). Therefore, all potential beneficiaries
of the measure are undertakings in difficulty within the
meaning of point 10(c) of the Community guidelines on
(98) This
procedure
concerns
only
§8c(1a)
KStG,
since
the
State aid for rescuing and restructuring firms in difficulty
opening of the formal investigation procedure was
(hereinafter: the Rescue and Restructuring Guidelines). As
limited to this provision. Germany cannot rely on the
a consequence, none of the beneficiaries is eligible for de
argument that the Commission has never formally
minimis aid pursuant to Commission Regulation (EC) No
objected to §8(4) KStG in order to justify §8c(1a) KStG
1998/2006 of 15 December 2006 on the application of
because the German authorities have never notified §8(4)
Articles 87 and 88 of the Treaty to de minimis aid ( 39 ), as
KStG.
Article 1(h) of that Regulation excludes undertakings in
difficulty from its scope.
(99) The
Commission
reserves
the
right
to
analyse
§8(4)
KStG
under the State aid rules, should it transpire that this
5.4. Conclusion
provision may have provided undertakings with a
selective advantage.
(105) Therefore, as all the requirements laid down in
Article 107(1) TFEU are met, the Commission takes the
view that the scheme on the tax carry-forward of losses
in the case of restructuring of companies in difficulty
constitutes State aid within the meaning of that article.
5.2.5. Similar tax schemes in other Member States
(100) The fact that other Member States have similar or
identical tax schemes in operation, which they have not
notified to the Commission, has no bearing on the
analysis of the question whether a given measure
6. ASSESSMENT OF THE COMPATIBILITY OF THE
constitutes State aid.
MEASURE

(106) The Commission may declare State aid compatible with
the internal market pursuant to Article 107(3) TFEU.
According to the settled case-law of the Court, the
burden of proof for demonstrating that a measure is
(101) The Commission will analyse the information submitted
compatible lies with the Member State
( 40 ). The
by Germany pursuant to Article 10 of the Procedural
Commission notes in this respect that Germany, despite
Regulation ( 38 ).
the explicit invitation by the Commission in the opening
decision, has not submitted any information regarding
the matter to the Commission. For that reason alone,
the Commission cannot declare the aid measure
compatible with the internal market.
5.2.6. Conclusion on the existence of a selective advantage
(102) The Commission therefore concludes that §8c(1a) KStG
provides a selective advantage to the companies to which
it applies.
(107) The Commission has nevertheless examined whether the
measure could be declared compatible with the internal
market. The Commission has wide discretion in aid cases
falling under Article 107(3) TFEU ( 41 ). Exercising this
5.3. Effect on intra-Union trade
discretion, it has issued guidelines and notices setting
forth criteria for declaring certain types of aid compatible
(103) The measure must be liable to affect intra-Union trade
with the internal market under Article 107(3) TFEU. It is
and distort or threaten to distort competition. §8c(1a)
settled case-law that the Commission is bound by the
KStG is not sector-specific, i.e. all sectors can benefit
guidelines and notices that it issues in the area of
from it. Virtually all sectors of the German economy
are active on markets open to competition and intra-
( 39 ) OJ L 379, 28.12.2006, p. 5.
Union trade. Hence, the measure is liable to affect
( 40 ) Case C-364/90 Italy v Commission [1993] ECR I-2097, paragraph
intra-Union trade and to distort or threaten to distort
20; Joined Cases T-132/96 and T-143/96 Freistaat Sachsen
competition.
(T-132/96) and Volkswagen AG and Volkswagen (T-143/96) v
Commission [1999] ECR II-3663, paragraph 140; Case C-372/97
Italy v Commission [2004] ECR I-3679, paragraph 81.
( 38 ) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
( 41 ) Case C-142/87 Belgium v Commission [1990] ECR I-959, paragraph
down detailed rules for the application of Article 93 of the EC
56, and Case C-39/94 SFEI and Others [1996] ECR I-3547,
Treaty (OJ L 83, 27.3.1999, p. 1).
paragraph 36.

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EN
10.9.2011 Official
Journal
of
the
European
Union L
235/37
supervision of State aid inasmuch as they do not depart
(113) The Commission notes, however, that a limited amount
from the rules in the Treaty and are accepted by the
of aid to certain beneficiaries may be declared compatible
Member States ( 42 ).
with the internal market pursuant to section 4.2 of the
Temporary Framework provided that it meets all the
conditions of a German aid scheme which the
Commission has approved on this legal basis. In order
to be eligible for this type of aid, the beneficiary must
(108) It is therefore necessary to assess first whether the
demonstrate in particular that it was not an undertaking
notified aid falls under the scope of one or more
in difficulty on 1 July 2008 within the meaning of the
guidelines or notices, and can be declared compatible
Rescue and Restructuring Guidelines (for large under
with the internal market because it fulfils the conditions
takings) or within the meaning of Article 1(7) of
for compatibility set out therein.
Commission Regulation (EC) No 800/2008 of
6 August 2008 declaring certain categories of aid
compatible with the common market in application of
Articles 87 and 88 of the Treaty (General block
exemption Regulation — GBER) ( 44 ) (for SME) and that
6.1. Possible compatibility on the basis of the
the gross grant equivalent of the aid is not higher than
Temporary Framework ( 43 )
EUR 500 000. Furthermore, the other conditions in
section 4.2.2 of the Temporary Framework and of the
(109) Since §8c(1a) KStG was introduced in order to tackle the
decision authorising the German aid scheme must be
problems resulting from the financial and economic
met.
crisis, the Commission examined whether it could be
declared compatible under Article 107(3)(b) TFEU, as
interpreted by the Temporary Framework.
6.2. Possible compatibility on the basis of the
Rescue and Restructuring Guidelines ( 45 )
(110) In the light of the current financial and economic crisis
and its impact on the overall economy of the Member
(114) Since §8c(1a) KStG concerns tax advantages for ailing
States, the Commission considers that certain categories
companies, the Commission examined its compatibility
of State aid are justified, for a limited period, to remedy
under the Rescue and Restructuring Guidelines. Under
this crisis and they can be declared compatible with the
these Guidelines, only companies in difficulty are
internal market under Article 107(3)(b) TFEU. The
eligible for aid. Whereas an insolvent or over-indebted
Temporary Framework sets out the conditions under
company can be considered as being in difficulty within
which the Commission will declare such aid schemes
the meaning of the Guidelines, paragraph 13 of the
compatible.
Rescue and Restructuring Guidelines provides that a
firm belonging to or being taken over by a larger
business group is not normally eligible for rescue or
restructuring aid. One of the requirements of §8c(1a)
KStG is a change in shareholding. After such a change,
(111) However, §8c(1a) KStG does not fall under any of the
the target company might belong to a group. In this case,
measures set out in the Temporary Framework because it
it would normally be for the group to assist the target
concerns tax breaks for companies in difficulty. However,
company in difficulty, which would then not be eligible
the Temporary Framework does not provide for State aid
for aid under the Rescue and Restructuring Guidelines.
in the form of tax breaks.
(112) The Commission therefore takes the view that §8c(1a)
(115) In addition, even for the beneficiaries eligible for aid
KStG does not meet the requirements for being
under the Rescue and Restructuring Guidelines, other
declared compatible under Article 107(3)(b) TFEU, as
requirements of these Guidelines are not met.
interpreted by the Temporary Framework.
( 42 ) Case C-313/90 CIRFS and Others v Commission [1993] ECR I-1125,
paragraph 36; Case C-311/94 IJssel-Vliet [1996] ECR I-5023,
paragraph 43; and Case C-351/98 Spain v Commission [2002]
ECR I-8031, paragraph 53.
( 43 ) Communication from the Commission — Temporary Community
(116) Under paragraph 25(a) of the Rescue and Restructuring
framework for State aid measures to support access to finance in
Guidelines, rescue aid can only take the form of loans or
the current financial and economic crisis (OJ C 83, 7.4.2009, p. 1).
loan guarantees. Hence, the tax advantage in question
With effect from 1 January 2011, this Communication has been
cannot be considered to be rescue aid.
replaced by a new version (OJ C 6, 11.1.2011, p. 5). However,
pursuant to Chapter 5 of the new version, this new version
applies for unlawful aid only to aid granted after 1 January
( 44 ) OJ L 214, 9.8.2008, p. 3.
2011. As Germany has suspended the application of the measure,
( 45 ) Community guidelines on State aid for rescuing and restructuring
no aid has been granted after that date.
firms in difficulty (OJ C 244, 1.10.2004, p. 2).

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L 235/38
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Official Journal of the European Union
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(117) In the case of restructuring aid, the Rescue and Restruc
(124) Furthermore, the Regional Aid Guidelines exclude from
turing Guidelines require the submission of a realistic
their scope undertakings in difficulty within the meaning
restructuring plan to restore the viability of the
of the Rescue and Restructuring Guidelines (see
company. The aid must be limited to the minimum
paragraph 9). Therefore, even aid for undertakings
necessary. In this context, the beneficiary has to make
located in eligible regions cannot be declared compatible
a contribution to the restructuring costs. Finally, to avoid
on the basis of the Regional Aid Guidelines.
undue distortions of competition, the Rescue and
Restructuring Guidelines provide for compensatory
measures.
(125) The Commission therefore takes the view that the
measure is not compatible with the internal market as
regional aid.
(118) Not all of these conditions are fulfilled by §8c(1a) KStG.
While the explanatory memorandum indicates that the
target company has to provide a reorganisation plan with
a positive business outlook, there is no indication that
6.4. Possible compatibility on the basis of the Envi
such a plan would meet the requirements of the Rescue
ronmental Aid Guidelines ( 47 )
and Restructuring Guidelines, nor that the amount of the
aid is limited to the minimum necessary. The amount of
(126) Finally, §8c(1a) KStG must be examined in the light of
aid depends on the losses that a company incurred in the
the Environmental Aid Guidelines.
past. Moreover, §8c(1a) KStG does not provide for a
contribution by the beneficiary or compensatory
measures.
(127) The primary objective of the Environmental Aid
Guidelines is to ensure that State aid measures will
result in a higher level of environmental protection
than would occur without the aid and to ensure that
(119) Finally, rescue and restructuring aid to large enterprises
the positive effects of the aid outweigh its negative
must be notified individually. It cannot be granted as part
effects in terms of distortions of competition, taking
of a scheme. §8c(1a) KStG does not distinguish between
account of the polluter pays principle (hereafter ‘PPP’)
large companies and SMEs.
established by Article 191 TFEU.
(120) Even for SMEs, where rescue and restructuring aid can in
(128) This objective is not fulfilled by §8c(1a) KStG. The
principle take the form of a scheme, the Commission
explanatory memorandum does not refer to any
notes that the particular requirements for such a
objective within the meaning of the Environmental Aid
scheme set out in paragraph 82 of the Rescue and
Guidelines.
Restructuring Guidelines are not met, for the same
reasons set out above in recital 117.
(129) As paragraph 20 of the Rescue and Restructuring
Guidelines states, a firm in difficulty, given that its very
(121) Therefore, the Commission takes the view that §8c(1a)
existence is in danger, cannot be considered an appro
KStG is not compatible with the internal market as
priate vehicle for promoting other public policy
restructuring aid.
objectives until such time as its viability is assured.
Since all potential beneficiaries of §8c(1a) KStG are
companies in difficulty within the meaning of
paragraph 10(c) of the Rescue and Restructuring
Guidelines, the Commission is of the opinion that
6.3. Possible compatibility on the basis of the
§8c(1a) KStG is not compatible as environmental aid.
Regional Aid Guidelines ( 46 )
(122) §8c(1a) KStG must also be examined in the light of the
Regional Aid Guidelines.
6.5. Possible compatibility on the basis of
Article 107(3) TFEU
(130) The Commission notes that the notified measure falls
(123) Potential beneficiaries of regional aid must be located in
within the scope of both the Temporary Framework
a German region eligible for regional aid. Under §8c(1a)
and the Rescue and Restructuring Guidelines. Therefore,
KStG, this is not necessarily the case, because the
when exercising its discretion under Article 107(3)(b) and
provision applies to companies located throughout
(c) TFEU, it is bound by these two texts, for the reasons
Germany.
set out above in recital 109 et seq.
( 46 ) Guidelines on national regional aid for 2007-2013 (OJ C 54,
( 47 ) Community guidelines on state aid for environmental protection
4.3.2006, p. 13).
(OJ C 82, 1.4.2008, p. 1).

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10.9.2011 Official
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(131) However, if the Commission is presented with
detailed rules for the application of Article 93 of the EC
compelling arguments for so doing, it can exercise its
Treaty ( 51 ): ‘where negative decisions are taken in cases of
discretion again provided that it acts within the limits
unlawful aid, the Commission shall decide that the
set out by the TFEU and the general principles of law,
Member State concerned shall take all necessary
in particular the principle of equal treatment, as inter
measures to recover the aid from the beneficiary’.
preted by the case-law of the Court ( 48 ). In this context,
according to the Court’s case-law, the Commission may
declare State aid compatible with the internal market if
the aid is to remedy a serious disturbance in the
(137) Given that the measure in question constitutes unlawful
economy of a Member State (Article 107(3)(b) TFEU)
and incompatible aid, it must be recovered in order to re-
or pursues an objective of common interest
establish the situation that existed on the market before
(Article 107(3)(c) TFEU) ( 49 ), is necessary to reach this
the aid was granted. Recovery is, therefore, to be effected
objective ( 50 ), and does not adversely affect trading
from the date when the advantage accrued to the bene
conditions to an extent contrary to the common interest.
ficiary, i.e. when the aid was made available to the bene
ficiary, and is to bear recovery interest until effective
recovery.
(132) In this case, Germany has not presented any arguments
that the aid is compatible with the internal market
directly under Article 107(3)(b) or (c) TFEU.
(138) The Commission is of the opinion that the annual date
for payment of corporate tax must be considered as the
relevant date for determining the date when the aid was
made available to the beneficiary.
(133) The Commission notes that, due to the design of the aid
measure, the amount of aid depends on the losses which
the beneficiary has recorded in the past. Therefore, there
(139) Germany must take all necessary measures to recover the
is no link between the amount of aid received by an
aid from the beneficiaries. In order to establish the
undertaking and the objective pursued by the aid
number of cases in which recovery must be effected,
scheme, i.e. the removal of barriers to restructuring and
Germany must draw up a list of enterprises which
support for undertakings in difficulty during the
have benefited from the measure in question since
economic and financial crisis. The Commission
1 January 2008. In this context the Commission notes
therefore concludes that the aid scheme is not limited
that Germany ceased application of the measure on
to what is necessary to achieve its objective. As a conse
30 April 2010. The German Federal Ministry of
quence, it distorts competition in the internal market to
Finance ordered the tax authorities responsible for tax
an extent contrary to the common interest.
collection to cease applying the Sanierungsklausel until
the Commission adopted a final decision in the case ( 52 ).
(134) The Commission therefore concludes that the measure
cannot be declared compatible based directly on
(140) The State aid to be recovered is to be calculated on the
Article 107(3)(b) or (c) TFEU.
basis of the tax declarations of the companies concerned,
i.e. the beneficiaries of §8c(1a) KStG. The aid amount is
to be calculated as the difference between the tax which
would have to be paid without the application of §8c(1a)
KStG and the tax that was actually paid after application
7. RECOVERY
of §8c(1a) KStG.
(135) Since the aid scheme has not been notified, it is unlawful
aid.
(141) This is without prejudice to the possibility that, where
the total amount of aid thus granted does not exceed a
gross grant equivalent of EUR 500 000, and where all
(136) By virtue of the Commission’s established decision-
other conditions set out in section 4.2.2 of the
making practice under Article 107 of the Treaty must
Temporary Framework and of a Commission decision
be recovered from the beneficiaries. This practice has
authorising a German aid scheme on that legal basis
been confirmed by Article 14 of Council Regulation
are met, in particular with regard to the company not
(EC) No 659/1999 of 22 March 1999 laying down
being in difficulty on 1 July 2008, the aid may be
deemed compatible on the basis of Article 107(3)(b)
( 48 ) See in particular Case C-313/90 Comité International de la Rayonne et
TFEU, as interpreted by the Temporary Framework, and
des Fibres Synthétiques (CIRFS) v Commission [1993] ECR I-1125.
the authorised German aid scheme. Where the total
( 49 ) Case T-162/06 Kronoply v Commission [2009] ECR II-1; especially
amount exceeds EUR 500 000, the excess must be
paragraphs 65, 66, 74, 75.
recovered.
( 50 ) Case T-187/99 Agrana Zucker und Strke v Commission [2001] ECR
II-1587, paragraph 74; Case T-126/99 Graphischer Maschinenbau v
Commission [2002] ECR II-2427, paragraphs 41-43; Case C-390/06
( 51 ) OJ L 83, 27.3.1999, p. 1.
Nuova Agricast [2008] ECR I-2577, paragraphs 68-69.
( 52 ) See footnote 15.

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L 235/40
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(142) The Commission draws the attention of Germany to the
Article 3
fact that the aid cannot be deemed compatible under de
minimis rules ( 53 ), or under a block-exempted ( 54 ) aid
Individual aid granted under the scheme referred to in Article 1
scheme, or under any aid scheme approved on the
which, at the time it is granted, fulfils the conditions laid down
basis of the Regional Aid Guidelines or the Research,
by any aid scheme approved by the Commission on a legal
Development, and Innovation Guidelines ( 55 ), because
basis other than the General Block Exemption Regulation, the
all these texts exclude the granting of State aid to under
Regional Aid Guidelines, the Research, Development and Inno
takings in difficulty ( 56 ). For all other approved aid
vation Guidelines, and which does not exclude undertakings in
schemes, Germany must verify whether the decision
difficulty as potential beneficiaries, is compatible with the
approving the aid scheme excludes undertakings in
internal market, up to the maximum aid intensities applicable
difficulty from the scope. If not, the aid could be
to that type of aid.
deemed compatible under these schemes, provided that
Germany demonstrates that all the conditions of the
relevant schemes were fulfilled when the aid was granted.
Article 4
1. Germany
shall
withdraw
the
scheme
referred
to
in
Article 1.
8. CONCLUSIONS
(143) On the basis of the foregoing, the Commission concludes
that the scheme for the carry-forward of tax losses
2. Germany
shall
recover
the
incompatible
aid
granted
under
(§8c(1a) KStG, ‘Sanierungsklausel’) constitutes State aid
the scheme referred to in Article 1 from the beneficiaries.
within the meaning of Article 107(1) TFEU which has
been unlawfully implemented in breach of Article 108(3)
TFEU. The scheme is incompatible with the internal
market.
3. The sums to be recovered shall bear interest from the date
on which they were made available to the beneficiaries until
their actual recovery.
(144) The Commission is of the opinion that Germany must
take all necessary measures to recover the aid from the
beneficiaries of the Sanierungsklausel,
4. The
interest
shall
be
calculated
on
a
compound
basis
in

accordance with Chapter V of Commission Regulation (EC) No
794/2004 ( 57 ).
HAS ADOPTED THIS DECISION:
5. Germany shall cancel all outstanding payments of aid
under the scheme referred to in Article 1 with effect from the
date of notification of this Decision.
Article 1
The State aid granted on the basis of §8c(1a) of the Corporate
Income Tax Act (Krperschaftsteuergesetz), unlawfully put into
Article 5
effect by Germany in breach of Article 108(3) TFEU, is incom
patible with the internal market.
1. Recovery of the aid granted under the scheme referred to
in Article 1 shall be immediate and effective.
Article 2
2. Germany
shall
ensure
that
this
Decision
is
implemented
within four months of the date of notification of this Decision.
Individual aid granted under the scheme referred to in Article 1
is compatible with the internal market under Article 107(3)(b),
as interpreted by the Temporary Framework, provided that the
aid amount does not exceed EUR 500 000, the beneficiary was
Article 6
not an undertaking in difficulty on 1 July 2008 and all the
other conditions set out in section 4.2.2 of the Temporary
1. Within two months of notification of this Decision,
Framework are met.
Germany shall submit the following information to the
Commission:
( 53 ) Commission Regulation (EC) No 1998/2006 of 15 December 2006
on the application of Articles 87 and 88 of the Treaty to de minimis
aid, OJ L 379, 28.12.2006, p. 5.
( 54 ) See footnote 44.
(a) The list of beneficiaries that have received aid under the
( 55 ) Community Framework for state aid for research and development
scheme referred to in Article 1 and the total amount of
and innovation (OJ C 323, 30.12.2006, p. 1).
aid received by each of them under the scheme;
( 56 ) See Article 1(6)(c) GBER; point 9 Regional Aid Guidelines; chapter
2.1 at the end, Research and Development and Innovation
Guidelines.
( 57 ) OJ L 140, 30.4.2004, p. 1.

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(b) The total amount (principal and interest) to be recovered
to comply with this Decision. It shall also provide detailed
from each beneficiary;
information concerning the amounts of aid and recovery
interest already recovered from the beneficiaries.
(c) A detailed description of the measures already taken or
planned to comply with this Decision;
Article 7
This Decision is addressed to the Federal Republic of Germany.
(d) Documentary evidence that the beneficiaries have been
ordered to repay the aid.
Done at Brussels, 26 January 2011.
2. Germany shall keep the Commission informed of the
progress of the national measures taken to implement this
Decision until the recovery of the aid granted under the
For the Commission
scheme referred to in Article 1 has been completed. Upon
request by the Commission, Germany shall immediately
Joaquín ALMUNIA
submit information on the measures already taken or planned
Vice-President

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