When accepting a calculation method of the taxable basis proposed by the taxpayer, the tax authorities should compare that method to the prudent behaviour of a hypothetical market operator, which would require a market conform remuneration of a subsidiary or a branch, which reflect normal conditions of competition. For example, a market operator would not accept that its revenues are based on a method which achieves the lowest possible outcome if the facts and circumstances of the case could justify the use of other, more appropriate methods (SA.38373, para 56, emphasis added).
However, the GC also clarifies that the "jurisprudence does not in any way support that the existence of such reports is in itself sufficient to consider that the beneficiary of that measure has not benefited from an economic advantage within the meaning of Article 107, paragraph 1 (...) the Member State concerned can not rely on the findings of reports of independent consultancy firms without offering itself an adequate response to the issues that a prudent investor would have considered in the context of the case" (para 50, own translation from Spanish, emphasis added).
Anyway, the case law is now more open to the inclusion of alternative sources of revenue in the public investment in complex infrastructure projects as a result of the Ciudad de la Luz Judgment.
In its ING Groep Judgment, the CJEU determined that the Commission could not evade its obligation to assess the economic rationality of an amendment to the repayment terms of the aid granted by the Dutch State to ING in the light of the private investor test solely on the ground that the capital injection subject to repayment itself already constituted State aid--since only after such an assessment would the Commission be in a position to conclude whether an additional advantage within the meaning of Article 107(1) TFEU had been granted.
30 [...] in view of the objectives pursued by Article [107(1) TFEU] and the private investor test, an economic advantage must, even where it has been granted through fiscal means, be assessed in the light of the private investor test if, on conclusion of an overall assessment, it appears that, notwithstanding the fact that the means used were instruments of State power, the Member State concerned has conferred that advantage in its capacity as shareholder of the undertaking belonging to it.
31 It follows that the applicability of the private investor test to a public intervention depends, not on the way in which the advantage was conferred, but on the classification of the intervention as a decision adopted by a shareholder of the undertaking in question.
32 Furthermore, that test is one of the factors which the Commission is required to take into account for the purposes of establishing the existence of aid and is therefore not an exception that applies only if a Member State so requests, where the constituent elements of State aid incompatible with the common market referred to in Article [107(1) TFEU] have been found to be present (see Commission v EDF, paragraph 103).
33 Consequently, where it appears that the private investor test may be applicable, the Commission is under a duty to ask the Member State concerned to provide it with all relevant information enabling it to determine whether the conditions governing the applicability and the application of that test are met (see Commission v EDF, paragraph 104).
34 The application of that case-law cannot be compromised merely because, in this case, what is at issue is the applicability of the private investor test to an amendment to the conditions for the redemption of securities acquired in return for State aid.
35 Indeed, as the Advocate General has stated [...] any holder of securities, in whatever amount and of whatever nature, may wish or agree to renegotiate the conditions of their redemption. It is, consequently, meaningful to compare the behaviour of the State in that regard with that of a hypothetical private investor in a comparable position (C-224/12 at paras 30-35, emphasis added).
(96) [...] the private investor principle can be applied only in the context of the pursuit of an economic activity, not in the context of the exercise of regulatory powers. A public authority cannot use as an argument any economic benefits it could derive as the owner of an enterprise in order to justify aid granted in a discretionary manner by virtue of the prerogatives it enjoys as the tax authority in relation to the same enterprise.(97) While a Member State may act as a shareholder in addition to exercising its powers as a public authority, it must not combine its role as a State wielding public power with that of a shareholder. Allowing Member States to use their prerogatives as public authorities for the benefit of their investments in enterprises operating in markets that are open to competition would render the Community rules on State aid completely ineffective." (Decision 2005/145/EC of 16 December 2003 on the State aid granted by France to EDF).
"[...] the purpose of the private investor test is to establish whether, despite the fact that the State has at its disposal means which are not available to the private investor, the private investor would, in the same circumstances, have taken a comparable investment decision. It follows that neither the nature of the claim, nor the fact that a private investor cannot hold a tax claim, is of any relevance." (ECJ C-124/10 P, at para. 37, emphasis added).
"(92) [...] in view of the objectives underlying [Article 107(1) TFEU] and the private investor test, an economic advantage must – even where it has been granted through fiscal means – be assessed inter alia in the light of the private investor test, if, on conclusion of the global assessment that may be required, it appears that, notwithstanding the fact that the means used were instruments of State power, the Member State concerned conferred that advantage in its capacity as shareholder of the undertaking belonging to it.
(93) It follows that [...] the obligation [...] to verify whether capital was provided by the State in circumstances which correspond to normal market conditions exists regardless of the way in which that capital was provided by the State [...]" (ECJ C-124/10 P, emphasis added).
"[...] contrary to the assertions made by the Commission and the EFTA Surveillance Authority, the private investor test is not an exception which applies only if a Member State so requests, in situations characterised by all the constituent elements of State aid incompatible with the common market, as laid down in [Article 107(1) TFEU] . [...] where it is applicable, that test is among the factors which the Commission is required to take into account for the purposes of establishing the existence of such aid." (ECJ C-124/10 P, at para. 103, emphasis added)