The European Commission (the Commission) has been analysing the Member States’ tax ruling practice, as well as advance pricing agreements (APAs) granted by tax authorities in favour of certain entities or groups. The Commission claims that such rulings deviate from the arm’s length principle (ALP) and that they grant an economic advantage to beneficiaries in a selective manner. The use of State aid rules in tax matters, in general, has led, however, to criticism. This article examines whether the State aid rules provide an appropriate instrument for controlling profit-shifting by multinational groups.