Wathelet backed an appeal by the European Commission to overturn rulings by the General Court of the European Union that annulled Commission decisions on the Spanish law.

The advocate general said that the tax breaks are ‘selective’, despite being available to every companies, and therefore illegal.

“The measure at issue is selective since it benefits undertakings performing cross-edge transactions but not undertakings performing the same transactions at national level,” he said.

“Once a tax measure derogates from the ‘normal’ or reference tax regime and benefits undertakings performing the transactions in question to the detriment of others that perform similar transactions and are therefore in a comparable situation that measure is by definition discriminatory or selective unless the differentiation created by the measure is justified by the nature or general scheme of the system of which it forms a portion,” the advocate general said.

Opinions of advocates general are not binding on the court, but are followed in the majority of cases.

The European Commission is currently investigating possible illegal state aid given to companies including Amazon and Apple and the issue of selectivity is also important to these, said tax expert Heather Self of Pinsent Masons, the law firm behind Out-Law.com.

“The solution questions will be what the relevant ‘normal or reference regime’ is, and whether the rulings grant benefits to these taxpayers in comparison to others in a comparable situation,” Self said.

“There are potentially clear parallels to be drawn between the advocate general’s opinion and the on-going investigations insofar as activity with a cross-edge dimension could be considered most likely to harm the internal market. The on-going state aid investigations, however, relate to transfer pricing issues, which are a fundamental portion of the overall tax system in the countries concerned. In contrast, the advocate general’s opinion in the Spanish case relates to a specific relief granted on an acquisition, so the reasoning may be less relevant to the tax investigation cases,” Self said.