Selectivity. (40) Article 61(1) of the EEA Agreement requires that a measure, in order to be defined as state aid, favours ‘certain undertakings or the production of certain goods’. The Authority has previously found that even if an aid mea sure concerns a whole economic sector, it does not prevent it from being covered by Article 61(1) of the EEA Agreement (39). The Authority maintained that position in its recently adopted Guidelines on the notion of state aid (‘NoA Guidelines’) (40).
Selectivity. (190) To be characterised as state aid within the meaning of Article 61(1) of the EEA Agreement, the measure must also be selective in that it favours ‘certain undertakings or the production of certain goods’. Not all measures which favour economic operators fall under the notion of aid, but only those which grant an advantage in a selective way to certain undertakings, categories of undertakings or to certain economic sectors.
Selectivity. As outlined above, the HFF is according to Article 7 of Act No 121/1997 exempted from paying a guarantee premium pursuant to Article 6 of the Act. The main rule according to Act No 121/1997 is that every entity enjoying a State guarantee is subject to the guarantee premium provided for in Article 6. Those exempted are obligations that are subject to the higher risk premium pursuant to Article 4 of the Act, the HFF, the Central Bank of the Iceland and the Student Loan Fund. Consequently, under Article 7 of the Act, it is only the HFF and the two other public institutions that are exempt from paying a premium to the State for being granted State guarantees. The aid measure therefore appears to be selective.
Selectivity. The aid measure must be selective in that it favours ‘certain undertakings or the production of certain goods’. The proposed scheme only covers certain cooperatives as speci- fied in the draft Section 10-50 of the Tax Act. These cooperative societies are entitled to a deduction of up to 15 % in the part of their income deriving from trade with their members. Thus, the tax base of these undertakings is reduced, and thereby also their income tax. This tax rule deviates from the normal rules on income tax payable by undertakings in Norway. On this basis, the proposed scheme appears to be selective in that it favours certain undertakings. However, the Norwegian authorities argue, in essence, that the tax benefit for the cooperatives is justified by the nature or general scheme of the Norwegian tax system (4). In particular, the Norwegian authorities claim that the proposed scheme implies that ‘the general system of equity financing for corporations by receiving non-taxable deposits is made applicable also to the coopera- tive societies’ (5). According to Section 3.4 of the Authority's Guidelines on busi- ness taxation (6), certain differential measures whose economic rationale makes them necessary to the smooth functioning and effectiveness of the tax system might not constitute State aid. In such cases, the measure would no longer be considered selec- tive (7). Against this background, the Authority has to examine whether the logic underlying the tax exemption could justify a differen- tiation between the cooperatives covered by the proposed scheme and other undertakings. As the exemption constitutes a derogation from the income tax, this tax will be the general system against which the logic of the derogation must be measured. In other words, the Authority will examine whether the logic of the tax exemption for cooperatives is in line with the objectives of the income tax itself. According to the proposed scheme, certain cooperatives will be entitled to a deduction in their income whereas companies which are organised as limited companies etc. will not be entitled to the same tax deduction. Thus, if a cooperative and a limited company use their own income to add to their equity capital, the cooperative covered by he proposed scheme will benefit from a tax deduction which is not open to the limited company.
Selectivity. (104) The LNG Supplement is a selective advantage as it was granted solely to Litgas pursuant to a specific legal act — the LNG Terminal Law. Pursuant to the law other gas suppliers were not eligible to perform this function (See section 3.3.6).
Selectivity. (112) Since the compensation for the provision of the USO for the transitory regime benefits only one undertaking (ELTA) and provides additional funds to that undertaking, the measure confers a selective advantage on ELTA.