The laws of some EU Member States (particularly Belgium, Italy, Portugal and Spain) have a more favorable taxation for some or all cooperatives than the limited liability companies. The existence of a privileged tax regime has been traditionally associated with the singular nature of capital and profit cooperative. On this basis, the application of a more favorable tax regime for cooperatives would be justified according to the protection they need against any distortions that the actual functioning of the market may cause, favoring the equal position of cooperatives with investor-owned corporate competitors. But clearly there are other economic sectors which question these regimes from the standpoint of competition. The position of the European Commission on the topic has not been definitively stated yet. They are currently open files against Spain, France and Italy, respectively: 1. In Spain, the complaint is directed against the distribution of fuel to third non-members carried out by agricultural cooperatives. An initial decision of the Commission (2003/293/EC Decision, 11 December 2002) established the absence of advantage which may be contrary to Community Law. However, the CFI (Sentence 12 December 2006, Case T-146/03, OJ C 331, 30.12.2006) annulled Article 1 of Commission Decision, which will force it to go into the substance of the matter and decide again on the subject. 2. Regarding France, the complaint is focused on the tax treatment of cooperatives engaged in marketing and processing agricultural products. 3. In the Italian case, there are two open procedures: the first one is the result of two complaints (relating to cooperative banks and to the most important consumer cooperatives in the country), and the second one stems from a preliminary ruling that the Italian Supreme Court of Cassazione has presented before the ECJ since the tax treatment of cooperatives, as a whole, constitutes a State aid which results in incompatible with the Treaty. This is the case that has alarmed the sector the most. Besides these open files of information, there is another one against Norway (EFTA Member State), which examines the claim of reintroducing a favorable tax regime involving the deductibility of some profits from operations with partners who intended to increase the share capital. Although it appears that there will be no early resolution of these matters by the Commission, the Commission arises in its preliminary analysis that the specific tax system of cooperatives should be considered as State aid, as they are entities that are present in the same market as other companies, and could lead to distortion of competition, but it also seems to allow that a different treatment of mutual operations (between the partner and the cooperative) may be compatible with the Treaty provided that the cooperatives could be characterized within the category of small and medium enterprises (SMEs). This paper aims to analyze the options pointing the reasons for and against the maintenance of a privileged tax regime for cooperatives. Bibliography: ALGUACIL MARÍ, M.P.: “Tratamiento fiscal de las cooperativas a la luz del régimen europeo de Ayudas de Estado”, CIRIEC Revista Jurídica de Economía Social y Cooperativa, núm. 14, 2003. CARDONA CONTHE, J.: “Algunas reflexiones sobre el artículo 129.2 de la C.E. desde el sector del cooperativismo agrario”, CIRIEC Revista Jurídica de Economía Social y Cooperativa, núm. extraordinario, 2003. COMUNICACIÓN DE LA COMISIÓN AL CONSEJO, AL PARLAMENTO EUROPEO, EL COMITÉ ECONÓMICO Y SOCIAL EUROPEO Y AL COMITÉ DELAS REGIONES sobre fomento de las cooperativas en Europa, Bruselas, 23/2/2004 COM(2004) 18 FUNDACIÓN EZAI: Propuesta europea sobre fiscalidad de cooperativas: bases para una estrategia, Position paper, 2006. GADEA, E. / SACRISTÁN, F. / VARGAS VASSEROT, C. (Coordinador): Régimen jurídico de la sociedad cooperativa del siglo XXI. Realidad actual y propuestas de reforma, Madrid, Dykinson, en prensa. HINOJOSA TORRALVO, J.J. / AGUILAR RUBIO, M.: “Algunas adaptaciones necesarias y urgentes para el régimen fiscal de las cooperativas”, Libro de Actas del Congreso Internacional CIRIEC Innovación y management, las respuestas a los grandes desafíos de las empresas de laeconomía pública, social y cooperativa, Sevilla, CIRIEC, 2008. . MONTERO SIMÓ, M.: “El régimen fiscal de las sociedades cooperativas: cuestiones en revisión”, CIVITAS Revista Española de Derecho Financiero, núm. 135, 2007. VARGAS VASSEROT, C. / AGUILAR RUBIO, M.: “Las operaciones de las cooperativas con terceros y la infundada limitación de las mismas por su tratamiento fiscal privilegiado”, REVESCO, núm. 83, 2004.