In two judgments published on 4 February 2016, the European Court of First Instance upheld the EU-Commission’s previous assessment regarding the illegality of the so-called “restructuring clause” (“Sanierungsklausel“) of § 8c para 1a German Corporate Tax Code (“Körperschaftssteuergesetz“, “KStG“).
In the two cases underlying the decision, “Heitkamp Bauholding GmbH” (T-287/11) and “GFKL Financial Services AG” (T-620/11), the General Court dismissed the actions brought by the two companies against the Commission’s decision of 26 January 2011 (C 7 / 2010), according to which the Sanierungsklausel constitutes unlawful state aid.
These recent judgments thus again confirm the corresponding decision of the European Court of Justice (ECJ) against the Federal Republic of Germany of 3 July 2014 ((C-102/13 P) whose application has already been declared inadmissible because of late application (!)) the incompatibility of this provision with EU-Law. The view of the European constitutional bodies is undoubtedly an obstacle on the way to a sustainable restructuring of companies – as the fate of at least Heitkamp illustrates: The holding has been wound up and parts of the company have been sold to competitors. Accordingly, the turnaround of the group as a whole failed.