CJEU – Recent Developments in Direct Taxation 2023

1. Introduction

The question before the European Court is whether a specific windfall tax on electricity producers introduced by a Romanian lawmaker meets the tests so that it qualifies as State aid granted to producers using certain technologies which, unlike the Romanian appellant company, are being tax exempt. Case C-391/23 Braila Winds is a State aid case, but it concerns a direct tax levied in such a way that it is open to accusations of conferring a selective advantage for certain other categories of producers, i.e. producers of electricity from fossil fuels, including cogeneration, as well as producers of electricity from biomass.

We believe that a particularly interesting aspect for tax professionals and lawyers in this case is the fact that the appellant company has taken a strategic approach that appears to lead it on the path to an important potential result, namely the ability to benefit at a later stage, from a remedy directly available to its individual case, secured under the proceedings of the referring national court. Even if the State aid in question is subsequently deemed as lawful by the European Commission and/or upon review of the European Court, might such a co...