Assessing the Material Selectivity of Tax Measures a

Keywords: State aid, tax measure, material selectivity, de iure selectivity, de facto selectivity, three-step test, progressive turnover tax

Abstract: The article focuses on the selectivity of Member States' tax measures when assessing their compliance with EU State aid rules. Selectivity is the most complex and controversial aspect of this assessment, due to the inconsistent case law of the Court of Justice of the European Union (CJEU) and the absence of a unified methodology. The text describes the CJEU's current approach to assessing material selectivity in both its de iure and de facto forms. The article further analyzes landmark judgments concerning tax rulings and progressive turnover taxes in Hungary and Poland. A consequence of these recent judgments is the strengthening of the tax sovereignty of Member States and the limitation of the European Commission's expansive approach. This shift by the CJEU towards accepting greater sovereignty of Member States may lead to the introduction of creative tax regimes by the Member States. The Commission will therefore have to find a new path for controlling State aid in the tax area.