The European Commission referred the United Kingdom to the European Union’s Court of Justice due to its inability to recover all illegal aid in the form of a tax break of around 100 million euros in Gibraltar.
On 19 December 2018, the European Commission decided on the corporate tax exemption system in Gibraltar, applicable from January 1, 2011 to June 30, 2013 and from January 1, 2011 to December 31, 2013, in addition to five individual interpretations issued in 2011-2013.
The European Commission has ended its legal challenge against Britain over state aid granted by Gibraltar to multinational companies after Britain said the support had been fully recovered.
The EU executive said in a statement on Wednesday that it had repealed its decision to refer Britain to the European Court of Justice (ECJ).
The Commission found in December 2018 that Gibraltar's corporate tax exemption regime and five tax rulings were illegal under EU state aid rules and ordered Britain to recover around 100 million euros ($115.38 million) by April 2019.
By March 2021, Gibraltar had only recovered aid from two out of four beneficiaries, prompting the Commission to refer Britain to the ECJ.
However, the Commission said that Gibraltar had completed the recovery of state aid by July 14.