The definition of state aid is found in Article 107(1) TFEU. In order for state aid to be present all of the following four conditions need to be fulfilled:

• Aid must be present; i.e. a financial advantage such as a tax benefit. Such aid must be granted by an EU Member State (or any lower level of government) or through state resources, in a manner attributable to that state.
• Such aid should distort or threaten to distort competition and affect trade between EU Member States.
• Such aid should favor certain undertakings or the production of certain goods; i.e. it needs to be ‘selective’.

In 2001, the EU Commission launced a number of investigations into “transfer pricing schemes” launched by Belgium, Luxembourg and the Netherlands in relation to Apple, Starbucks, Fiat,  and Amazon.