The preoccupation among EU Member States to comply with the State Aid rules in formulating tax legislation is understandable. Under the terms of the EU Treaty, where the State Aid rules are contravened, not only must the offending legislation be reversed, but any taxpayers who benefited have to be pursued to recover the tax reliefs they were granted.

The Commission is taking Greece to the ECJ for failing to recover a corporation tax relief, previously ruled as illegal, from the companies which benefitted from it.

The Greek tax law allowed companies to deduct up to 35% of profits in 2003 and 2004 from their tax base for projects in a range of activities, provided that the exempted profits were directly ploughed back in to the business. This relief was identified as contrary to the State Aid rules back in 2007, and the Commission decision required Greece to “immediately and effectively recover the incompatible aid, including interest, from the beneficiaries”.

Apparently the Greek authorities have not confirmed to the Commission that they have done so, hence this Court action by the Commission.