State Aid, Subsidy and Tax Incentives under EU and WTO Law

In the process of globalization, incentives occupy an increasingly important
place on the legal scene. Given the critical importance of taxation systems, fiscal
measures have become decisive tools to confer incentives in the different stages
of the tax raising process. Yet the application of tax incentive rules (via such
measures as exemptions, credits, deferrals, cancellations or allowances) remains
complex and intricate. Against this background, the regulatory framework of tax
incentives, which applies at national levels, derives from two major sources: the
law of State aid under EU law and the law of subsidies under WTO law. These two
legal systems affect and shape the internal structure of national tax systems. Their
adaptation to direct taxation may however be fraught with difficulties. Given that
aids and subsidies granted in the form of tax advantages have proliferated over
the last decade, it is crucial to investigate whether EU and WTO regulation in this
regard is compatible with national tax systems.