EUROPE’S top court will decide this week on Spanish tax breaks for foreign takeovers in a ruling that may give clues as to how judges will deal with more complex tax cases involving Starbucks and Apple.

    The European Commission, in two rulings in 2009 and 2011, said the scheme, which applied to Spanish companies holding a stake of at least 5 percent in a foreign company for at least a year, broke EU state aid rules, and ordered Spain to recover the money.

    Banco Santander, Autogrill Espana, which is now known as World Duty Free Group, and Santusa Holding challenged the decisions at the Luxembourg-based General Court, Europe’s second-highest, which ruled in the companies’ favor.

    The EU competition enforcer then appealed to the Court of Justice of the European Union (ECJ), arguing the lower court was wrong to demand that it specify the type of companies that benefited unfairly from the tax breaks.

    The court’s verdict in the Spanish case Wednesday could give insight into the ECJ’s stance on high-profile rulings by the European Commission against tax breaks for multinationals such as Starbucks and Apple, which have already been appealed to the General Court by the Dutch and Irish governments.

    The Commission ordered Apple in August to pay Ireland a record 13 billion euros (US$13.6 billion) in unpaid taxes, ruling the firm had received illegal state aid.

    The Commission has also ruled that Starbucks, Fiat Chrysler and 35 other companies benefited from illegal sweetheart deals with several EU countries.

    The Spanish corporate tax scheme allowed companies that were tax resident in Spain to write down goodwill resulting from the acquisition of stakes in companies that were tax resident abroad.(SD-Agencies)