—

annul Commission Decision C(2019) 2526 final of 2 April 2019 on the State aid SA.44896 implemented by the United Kingdom concerning CFC Group Financing Exemption, in so far as it concerns the applicants;

—

if the decision is not annulled in its entirety, order that in determining the amount of aid to be recovered, losses, reliefs or exemptions which were available to an applicant at the time when it claimed the group financing exemption (GFE), or which would have been available to an applicant at that time had it not claimed the GFE, should in either case be taken into account even if access to those losses, reliefs or exemptions is now time barred under UK law;

—

order the defendant to pay the costs.

1.

First plea in law, alleging that the defendant has failed to establish that the group financing exemption (GFE) constitutes an advantage. The applicants argue that the defendant has failed to show that there is an advantage in each case where the GFE has been claimed. Further, each applicant argues that it chose to claim the GFE exemption without considering whether its liability could have been lower if it had done an analysis under the significant people functions test in Section 371EB (the ‘SPF test’) of Chapter 5 of Part 9A of the Taxation (International and Other Provisions) Act 2010.

2.

Second plea in law, alleging that there was no intervention by the State or through State resources. The applicants argue that the defendant has failed to prove that claiming the GFE has certainly led to a reduction in the UK corporate tax liability.

3.

Third plea in law, alleging that the GFE does not favour certain undertakings or the production of certain goods. The applicants argue that the defendant has erred by (i) defining the reference system too narrowly as the rules in Part 9A of the abovementioned legislation instead of the wider UK corporate tax system; (ii) failing to understand that Chapter 9 of the said Part 9A is not a derogation from Chapter 5 thereof; and (iii) failing to recognise that, even if the said Chapter 9 is a derogation from that Chapter 5, it is justified by the nature or general scheme of Part 9A of the legislation in question.

4.

Fourth plea in law, alleging that the GFE does not affect trade between Member States. The applicants argue that the defendant has erred by concluding that the GFE is liable to influence choices made by multinational groups as to the location of their group finance functions and their head office within the EU.

5.

Fifth plea in law, alleging that the GFE does not distort or threaten to distort competition. The applicants argue that the defendant has failed to prove that claiming the GFE has certainly led to a reduction in the UK corporate tax liability.

6.

Sixth plea in law, alleging that recovery of the alleged aid would be contrary to general principles of EU law. The applicants argue that the SPF test lacks legal certainty, the UK had a margin of appreciation to address that uncertainty and that the defendant has breached its duty to carry out a complete analysis of all relevant factors. By ordering the recovery of aid, the defendant has acted contrary to Article 16(1) of Council Regulation (EU) 2015/1589 (1) which prohibits the recovery of aid where recovery would be contrary to a general principle of EU law.

7.

Seventh plea in law, alleging that the selective advantage would be eliminated, and no recovery would be required, if the UK were retrospectively to extend the GFE to upstream lending and third-party lending. The applicants argue that the defendant has failed to acknowledge that taking such action would eliminate any selective advantage (assuming for the moment that there is one) and in such case there would be no unlawful state aid to be recovered under EU law.

8.

Eighth plea in law, alleging that, in determining the amount of the aid to be recovered, losses, reliefs or exemptions which were available to an applicant at the time when it claimed the GFE, or which would have been available at that time had it not claimed the GFE, should be taken into account even if access to those losses, reliefs or exemptions is now time barred under UK law. The applicants argue that that is the correct interpretation of recital 203 of the contested decision but, insofar as that is not the case, the contested decision is incorrect because failing to take such losses, reliefs or exemptions into account would lead to over-calculation of the amount of the aid which would introduce a distortion into the internal market.