Provisional text

JUDGMENT OF THE COURT (Second Chamber)

3 July 2025 ( * )

( Reference for a preliminary ruling – State aid – Article 107(1) TFEU – Aid scheme authorised by the European Commission – Support to the economy in the context of the COVID-19 pandemic – Refusal by the competent authority to grant aid – Legal action requesting that the court before which the matter has been brought order the adoption of a beneficial administrative act ex nunc – Expiry, during the legal proceedings, of the time limit prescribed for granting the aid – Date on which the aid is deemed to have been granted – Article 47 of the Charter of Fundamental Rights of the European Union – Right to an effective judicial remedy – Regulation (EU) 2015/1589 – Article 1 – Existing aid )

In Case C‑653/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia), made by decision of 1 November 2023, received at the Court on 6 November 2023, in the proceedings

‘TOODE’ SIA

v

Valsts ieņēmumu dienests,

THE COURT (Second Chamber),

composed of K. Jürimäe, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Second Chamber, M. Gavalec, Z. Csehi (Rapporteur) and F. Schalin, Judges,

Advocate General: A. Rantos,

Registrar: M. Aleksejev, Head of Unit,

having regard to the written procedure and further to the hearing on 11 December 2024,

after considering the observations submitted on behalf of:

– ‘TOODE’ SIA, by S. Ņukša, valdes locekle,

– the Latvian Government, by J. Davidoviča and K. Pommere, acting as Agents,

– the German Government, by J. Möller and P.‑L. Krüger, acting as Agents,

– the European Commission, by I. Georgiopoulos and V. Hitrovs, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 13 March 2025,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 107(1) TFEU and Article 1(b)(ii) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9).

2 The request has been made in proceedings between ‘TOODE’ SIA and the Valsts ieņēmumu dienests (National Tax Authority, Latvia) (‘the tax authority’) concerning a decision by which that authority refused to grant TOODE aid intended to ensure the flow of working capital for undertakings affected by the COVID-19 crisis.

Legal context

European Union law

Regulation 2015/1589

3 Article 1 of Regulation 2015/1589 provides:

‘For the purposes of this Regulation, the following definitions shall apply:

…

(b) “existing aid” means:

…

(ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the [European] Commission or by the Council [of the European Union];

…

(c) “new aid” means all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

…’

The communication on the Temporary Framework

4 The communication from the Commission on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (2020/C 91 1/01, OJ 2020 C 91 I, p. 1) was published on 20 March 2020 in the Official Journal of the European Union before being amended seven times. Points 21 and 22 of that communication, as amended by the communication from the Commission of 24 November 2021 (2021/C 473/01, OJ 2021 C 473, p. 1) (‘the communication on the Temporary Framework’), were in Section 3.1 of that communication, entitled ‘Limited amounts of aid’, and stated:

‘21. Beyond the existing possibilities based on Article 107(3)(c) TFEU, temporary limited amounts of aid to undertakings that find themselves facing a sudden shortage or even unavailability of liquidity can be an appropriate, necessary and targeted solution during the current circumstances.

22. The Commission will consider such State aid compatible with the internal market on the basis of Article 107(3)(b) TFEU, provided that all the following conditions are met …:

…

d. the aid is granted no later than 30 June 2022 …;

…’

Latvian law

5 Article 250(2) of the Administratīvā procesa likums (Law on administrative proceedings), in the version applicable to the facts in the main proceedings, provides:

‘When assessing the legality of an administrative act, the courts shall take into account in their decision only the grounds included by the public authority in the administrative act. This limitation shall not apply in cases where the application seeks the granting of a beneficial administrative act.’

6 Article 254(1) of that law is worded as follows:

‘If a court considers the application for the adoption of an administrative act to be well founded, it shall order the public authority to adopt the corresponding administrative act.’

7 The Latvian authorities adopted Ministru kabineta noteikumi Nr. 676 ‘Noteikumi par atbalstu Covid-19 krīzes skartajiem uzņēmumiem apgrozāmo līdzekļu plūsmas nodrošināšanai’ (Decree No 676 of the Council of Ministers laying down rules on aid to undertakings affected by the COVID-19 crisis to ensure the flow of working capital) of 10 November 2020 ( Latvijas Vēstnesis , 2020, No 222A; ‘the Latvian rules on aid’). The aid scheme introduced by the Latvian rules on aid, which entered into force on 17 November 2020, was established in accordance with the requirements set out in Section 3.1 of the communication on the Temporary Framework. By Decision SA.59592 (2020/N) of 16 December 2020, the Commission considered that scheme to be compatible with the internal market, provided, in particular, that the aid concerned was granted by 30 June 2021 at the latest, that date having subsequently been extended, by Commission Decision SA.100596 (2021/N) of 14 December 2021, to 30 June 2022.

8 Paragraph 23 of the Latvian rules on aid, in the version applicable to the facts in the main proceedings, stated:

‘The moment of granting the aid is deemed to be the day on which [the tax authority] takes a decision regarding the granting of the aid.’

9 Paragraph 24 of those rules was worded as follows:

‘The decision shall be taken by 30 June 2022, in accordance with [the communication on] the Temporary Framework.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

10 On 25 March and 9 April 2021, TOODE applied to the tax authority for aid under the national aid scheme intended to ensure the flow of working capital for undertakings affected by the COVID-19 crisis. By two initial decisions of 23 April and 7 June 2021, then two final decisions of 9 June and 23 July 2021, that authority refused to grant TOODE the aid applied for on the ground that it did not satisfy one of the conditions laid down in the Latvian rules on aid, relating to a decrease in turnover.

11 TOODE brought an action before a court of first instance, which was unsuccessful, and then brought an appeal, on 29 June 2022, before the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia), which is the referring court. By that appeal, TOODE requests, in accordance with Article 254(1) of the Law on administrative proceedings, in the version applicable to the facts in the main proceedings, that that court order the tax authority to adopt a beneficial administrative act granting the aid applied for.

12 The referring court notes that, as is apparent from paragraph 7 of the present judgment, the national aid scheme referred to above was declared by the Commission to be compatible with the internal market, provided, in particular, that the aid concerned was granted, in accordance with paragraph 24 of the Latvian rules on aid and point 22(d) of the communication on the Temporary Framework, by 30 June 2022 at the latest. It emphasises that that time limit expired during the proceedings before it.

13 That court explains that it must, in connection with the appeal brought by TOODE, seeking to obtain a beneficial administrative act, assess whether TOODE is still entitled to the aid applied for. In that regard, it must determine the date on which that aid is deemed to be ‘granted’, within the meaning of Article 107(1) TFEU, since it is a decisive factor in determining whether that aid constitutes ‘existing’ or ‘new’ State aid within the meaning of Article 1 of Regulation 2015/1589. It states, however, that, under Latvian law, national courts may order that beneficial administrative acts be adopted only for the future ( ex nunc ).

14 The referring court recalls that aid is deemed to have been granted at the moment at which the definitive and unconditional right to receive it is conferred on the beneficiary under national law. Given that the tax authority has never recognised that TOODE has the right to receive the aid applied for, such a definitive and unconditional right could, in principle, arise for an individual such as TOODE only following a judicial decision, where the court has found, after a full review of legality in accordance with the second sentence of Article 250(2) of the Law on administrative proceedings, in the version applicable to the facts in the main proceedings, that that individual satisfies all the conditions laid down by national law to receive the aid in question and has ordered the competent authority, on the basis of Article 254(1) of that law, to adopt a beneficial administrative act for the future.

15 The referring court recalls, however, that aid granted by the competent authority to a person after the expiry of a national aid scheme authorised by the Commission must be classified as ‘new’ aid in accordance with the case-law of the Court of Justice. It is nevertheless uncertain whether that case-law can be applied to a situation where the competent authority unduly refused to grant the aid when that scheme was still in force and where that authority, after the expiry of that scheme, has been ordered by a judicial decision to grant and to pay the amount of the aid.

16 In those circumstances, the Administratīvā apgabaltiesa (Regional Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Is Article 107(1) [TFEU] to be interpreted as meaning that State aid is to be considered to have been “granted” at the point in time when the competent public authority unduly refused to rule that an individual had a right to receive State aid, if such is established by a judicial decision made after the expiry of the time limit prescribed for granting the aid?

(2) Is Article 1(b)(ii) of [Regulation 2015/1589] to be interpreted as meaning that aid which, in the absence of a decision by the competent public authority within the time limit prescribed for granting the aid, is granted to an individual after the expiry of the period laid down by the aid scheme for granting the aid, pursuant to a judicial decision finding that, within the period laid down by the aid scheme for the granting of the aid, the individual fulfilled all the conditions laid down by national law to receive the aid in question and that the refusal of the competent public authority to grant the aid was unlawful, constitutes existing aid?’

Consideration of the questions referred

The first question

Preliminary observations

17 By its first question, the referring court asks, in essence, whether Article 107(1) TFEU must be interpreted as meaning that State aid under a national aid scheme authorised by the Commission must be regarded as having been ‘granted’, within the meaning of that provision, on the date on which the competent national authority unduly refused to confer the right to receive the aid on an individual that applied for the aid within the period laid down for granting it, where a judicial decision finds that refusal to be unlawful after the expiry of that period.

18 In that regard, it is apparent from the case-law of the Court that aid must be regarded as being ‘granted’, within the meaning of Article 107(1) TFEU, on the date on which the right to receive it is conferred on the beneficiary under the applicable national legislation. The decisive factor for establishing the date on which the right to receive State aid was conferred on its beneficiaries by a particular measure is the acquisition by those beneficiaries of a definitive right to receive that aid and the corresponding commitment, by the State, to grant that aid. It is on that date that such a measure is liable to distort competition and affect trade between Member States, within the meaning of Article 107(1) TFEU (see, to that effect, judgments of 21 March 2013, Magdeburger Mühlenwerke , C‑129/12, EU:C:2013:200, paragraph 40, and of 25 January 2022, Commission v European Food and Others , C‑638/19 P, EU:C:2022:50, paragraphs 115 and 123).

19 It is therefore for the referring court to determine, on the basis of the applicable national law and in compliance with EU law, when the State aid at issue in the main proceedings must be considered to be granted. To that end, that court must take account of all the conditions laid down by national law for the grant of the aid concerned (see to that effect, judgments of 21 March 2013, Magdeburger Mühlenwerke , C‑129/12, EU:C:2013:200, paragraph 41, and of 28 October 2020, INAIL , C‑608/19, EU:C:2020:865, paragraphs 31 and 32).

20 In particular, the referring court must determine whether national law permits the view, in a situation such as that in the main proceedings, that the definitive right to receive the aid concerned must be deemed to have been acquired ex tunc on the date on which the competent authority should have acted lawfully, that is to say, on the date of the undue refusal issued by that authority, or whether, on the contrary, national law may be interpreted only as meaning that the refusal decision by that authority, even if it were declared unlawful, could not have given the applicant a definitive right to receive the aid.

21 That being so, given that it is apparent from the explanations provided by the referring court that national law appears to be capable of being interpreted only in the latter sense, it must be recalled that, in the procedure laid down in Article 267 TFEU for cooperation between national courts and the Court of Justice, it is for the Court to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the questions referred to it. In order to provide such an answer which will be of use, the Court may decide to take into consideration rules of EU law to which the national court has made no reference in the wording of its question (see, to that effect, judgments of 20 March 1986, Tissier , 35/85, EU:C:1986:143, paragraph 9, and of 9 September 2021, LatRailNet and Latvijas dzelzceļš , C‑144/20, EU:C:2021:717, paragraph 29).

22 In the present case, it is apparent from the file before the Court that, in essence, the aid scheme at issue in the main proceedings set the time limit for granting the aid on the basis of the time limit set in the communication on the Temporary Framework and that that scheme was declared compatible with the internal market by decision of the Commission in the light, inter alia, of the fact that that time limit made it temporary. It follows that the application of that scheme constitutes an implementation of EU law, for the purposes of Article 51(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’).

23 Furthermore, the Court has previously noted that the application of the EU rules on State aid is based on an obligation of sincere cooperation between the national courts, on the one hand, and the Commission and the Courts of the European Union, on the other, in the context of which each acts on the basis of the role assigned to it by the Treaty (judgment of 21 November 2013, Deutsche Lufthansa , C‑284/12, EU:C:2013:755, paragraph 41). In that regard, when there are no EU rules governing the matter, although it is for the domestic legal system of every Member State to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from EU law, the Member States are, however, to ensure compliance in every case with the right to effective judicial protection of those rights as enshrined in the first paragraph of Article 47 of the Charter (see, to that effect, judgments of 19 March 2015, E.ON Földgáz Trade , C‑510/13, EU:C:2015:189, paragraphs 49 and 50, and of 28 January 2025, ASG 2 , C‑253/23, EU:C:2025:40, paragraph 75). Under the first paragraph of that Article 47, everyone whose rights and freedoms guaranteed by EU law are violated has the right to an effective remedy before a tribunal.

24 In those circumstances, it must be held that, by its first question, the referring court asks the Court, in essence, whether Article 107(1) TFEU and the first paragraph of Article 47 of the Charter must be interpreted as precluding an interpretation of national legislation whereby individual aid under a State aid scheme authorised by the Commission cannot be regarded as having been ‘granted’, within the meaning of that provision of the TFEU, on the date on which the competent national authority unduly refused to grant it to an individual that applied for the aid within the period laid down for granting it, where a judicial decision finds that refusal to be unlawful after the expiry of that period.

Substance

25 Since the outcome of interpreting Latvian law seems, as is apparent from paragraph 21 of the present judgment, to be that the aid at issue in the main proceedings may be deemed to be ‘granted’, within the meaning of Article 107(1) TFEU, only on the date of adoption of a beneficial administrative act pursuant to a judicial decision, it would not be possible to adopt such an act and, accordingly, to enforce that decision where, as in the present case, the time limit for granting the aid has expired during the judicial proceedings.

26 Aid granted when the Commission’s authorisation for that aid is no longer in force must, on account of it being new aid, be notified to the Commission under Article 108(3) TFEU and may not be put into effect until the Commission has found it to be compatible with the internal market (see, to that effect, judgments of 28 October 2021, Eco Fox and Others , C‑915/19 to C‑917/19, EU:C:2021:887, paragraph 36, and of 7 April 2022, Autonome Provinz Bozen , C‑102/21 and C‑103/21, EU:C:2022:272, paragraphs 32, 34 and 42).

27 It follows that the effectiveness of the right to a remedy guaranteed in the first paragraph of Article 47 of the Charter for an individual such as TOODE could not, in the situation described in paragraph 25 of the present judgment, be ensured, even if it were recognised by a judicial decision, following a full review of legality, that the applicant, which applied for the aid at issue, initially satisfied all the conditions for entitlement to that aid within the time limit set by the aid scheme concerned.

28 The enforcement of a judicial decision is an integral part of the right to an effective remedy, within the meaning of Article 47 of the Charter. That right would be illusory if the domestic legal system of a Member State were to allow a final, binding judicial decision to remain inoperative to the detriment of one party (judgments of 30 June 2016, Toma and Biroul Executorului Judecătoresc Horaţiu-Vasile Cruduleci , C‑205/15, EU:C:2016:499, paragraph 43, and of 29 July 2019, Torubarov , C‑556/17, EU:C:2019:626, paragraph 57).

29 Consequently, in the situation referred to in paragraph 25 of the present judgment, the first paragraph of Article 47 of the Charter, as a provision of EU law having direct effect, requires the national court to disapply national law that prevents the individual aid from being regarded as having been granted on the date of the refusal decision by the competent authority (see, to that effect, judgments of 24 June 2019, Popławski , C‑573/17, EU:C:2019:530, paragraph 61, and of 14 May 2020, Országos Idegenrendészeti Főigazgatóság Dél-alföldi Regionális Igazgatóság , C‑924/19 PPU and C‑925/19 PPU, EU:C:2020:367, paragraphs 139 and 140 and the case-law cited). In those circumstances, the date on which that aid is deemed to have been ‘granted’, within the meaning of Article 107(1) TFEU, must correspond to the date on which the competent authority unduly refused to grant the aid to TOODE.

30 In the light of the foregoing, the answer to the first question is that Article 107(1) TFEU and the first paragraph of Article 47 of the Charter must be interpreted as precluding an interpretation of national legislation whereby individual aid under a national aid scheme authorised by the Commission cannot be regarded as having been ‘granted’, within the meaning of that provision of the TFEU, on the date on which the competent national authority unduly refused to grant it to an individual that applied for the aid within the period laid down for granting it, where a judicial decision finds that refusal to be unlawful after the expiry of that period.

The second question

31 As a preliminary point, in view of the answer given to the first question, it should be noted that the aid at issue in the main proceedings must be deemed to have been granted on the date of the tax authority’s refusal decisions, that is to say, before the expiry of the period laid down for granting the aid.

32 In order to provide the referring court with an answer to the second question which will be of use to it, that question must be understood as seeking to ascertain, in essence, whether Article 1(b)(ii) of Regulation 2015/1589 must be interpreted as meaning that individual aid deemed to have been granted on the date on which the competent authority unduly refused to grant the aid to an individual that applied for it within the period laid down for granting it, but paid to that individual pursuant to a beneficial administrative act adopted on the basis of an order in a judicial decision finding that refusal to be unlawful after the expiry of that period, must be classified as ‘existing aid’ within the meaning of that provision.

33 In that regard, it should be recalled that Article 1(b)(ii) of that regulation provides that ‘existing aid’ is authorised aid, which includes aid schemes and individual aid which have been authorised by the Commission or by the Council. For its part, Article 1(c) of that regulation provides that ‘new aid’ means all aid schemes and individual aid, which is not existing aid, including alterations to existing aid.

34 The Court has also held that, from the moment at which the definitive right to receive State aid is conferred on the beneficiary under the applicable national law, the aid must be deemed to be granted, with the result that the actual transfer of the resources in question is not decisive (judgments of 19 December 2019, Arriva Italia and Others , C‑385/18, EU:C:2019:1121, paragraph 36, and of 20 May 2021, Azienda Sanitaria Provinciale di Catania , C‑128/19, EU:C:2021:401, paragraph 45 and the case-law cited).

35 It follows from that case-law that, since State aid such as that at issue in the main proceedings is deemed to have been granted at a time when the Commission’s authorisation for that aid was in force, it must be classified as ‘authorised aid’ and, accordingly, as ‘existing aid’ within the meaning of Article 1(b)(ii) of Regulation 2015/1589, irrespective of the fact that it is paid after the aid scheme approved by the Commission ceases to be valid.

36 It should be noted that, as the Advocate General stated in point 47 of his Opinion, such an interpretation is not capable of distorting competition on the market. Since, as is apparent from the case-law referred to in paragraph 18 of the present judgment, it is on the date on which the definitive right to receive State aid was conferred that a measure is likely to distort competition in a way that could affect trade between Member States, within the meaning of Article 107(1) TFEU, the payment of aid such as that at issue in the main proceedings after the expiry of the aid scheme concerned places the applicant for the aid in the situation in which it should have found itself if the competent authority had acted lawfully, and thus makes it possible precisely to restore the competitive balance on the market.

37 In the light of the foregoing, the answer to the second question is that Article 1(b)(ii) of Regulation 2015/1589 must be interpreted as meaning that individual aid deemed to have been granted on the date on which the competent authority unduly refused to grant the aid to an individual that applied for it within the period laid down for granting it, but paid to that individual pursuant to a beneficial administrative act adopted on the basis of an order in a judicial decision finding that refusal to be unlawful after the expiry of that period, must be classified as ‘existing aid’ within the meaning of that provision.

Costs

38 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

1. Article 107(1) TFEU and the first paragraph of Article 47 of the Charter of Fundamental Rights of the European Union

must be interpreted as precluding an interpretation of national legislation whereby individual aid under a national aid scheme authorised by the European Commission cannot be regarded as having been ‘granted’, within the meaning of that provision of the TFEU, on the date on which the competent national authority unduly refused to grant it to an individual that applied for the aid within the period laid down for granting it, where a judicial decision finds that refusal to be unlawful after the expiry of that period.

2. Article 1(b)(ii) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU]

must be interpreted as meaning that individual aid deemed to have been granted on the date on which the competent authority unduly refused to grant the aid to an individual that applied for it within the period laid down for granting it, but paid to that individual pursuant to a beneficial administrative act adopted on the basis of an order in a judicial decision finding that refusal to be unlawful after the expiry of that period, must be classified as ‘existing aid’ within the meaning of that provision.

[Signatures]

* Language of the case: Latvian.