Report 2011 - EFTA Court

The second part of the fourth plea: the selectivity of the contested tax
provisions
183 in relation to ESA’s statement of reasons with regard to the
selectivity of the contested tax provisions, it must be observed
that, in its Decision, ESA set out, first, thereby adopting the
approach of the Commission in the Åland islands case, that
captive insurance companies benefitting from lower taxation than
would normally apply to companies gained a selective advantage
because this favoured only captive insurance companies as the
prime beneficiaries of the tax relief. ESA asserted that this was, in
itself, sufficient to make the measures selective.
184 ESA concluded that the undertakings in the same legal and
factual position in this case were those which paid the full income,
capital and coupon taxes in Liechtenstein. in comparison to those
undertakings, captive insurance companies in Liechtenstein
received a selective advantage. ESA went on to note that, unlike
many recent complex fiscal aid cases, the objectives of the
measures in question were straightforward. While the standard
rate taxes generate revenue for the state, the reduction and
exemption applicable to captive insurance companies were, on
the Liechtenstein authorities’ own admission, designed to attract
a mobile and tax sensitive service sector to the Principality of
Liechtenstein. in turn, captive insurance companies were created
and normally located apart from the rest of their group, at
least in part, in order to benefit from lower taxation on profits
generated by a formalised form of self-insurance.
Findings of the Court
185 in the light of the foregoing, the Court concludes that the
contested Decision contains a sufficient statement of reasons for
the finding that a selective advantage was conferred on captive
insurance companies in Liechtenstein. Therefore, this part of the
plea must be rejected.
Joined Cases E-4/10, E-6/10 and E-7/10 Principality of Liechtenstein, Reassur Aktiengesellschaft,
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Swisscom RE Aktiengesellschaft v EFTA Surveillance Authority