Brussels, 02/12/2015 (Agence Europe) - The government of Luxembourg is currently discussing the possibility of appealing, in the next few days, against the decision of the European Commission to order it to recover between €20 million and €30 million from the company Fiat Finance and Trade, corresponding to state aid it found to be illegal and which was granted by means of a tax ruling (see EUROPE 11415).
In an interview with the Financial Times published on Wednesday 2 December, the Luxembourg finance minister, Pierre Gramegna, explained that if the Commission can have its own interpretation of transfer pricing rules, “others can too. This is worrying for companies and we live in a globalised world”. He went on to argue that the method used by the Commission was an “innovation undermining the usual interpretation of transfer pricing”. Last week, the Netherlands announced its intention to appeal against a similar Commission decision regarding Starbucks (see EUROPE 11442).
Gramegna went on to tell the Financial Times that if Luxembourg wanted to remain competitive, it would have to reduce nominal taxation because the base would become larger. According to the Financial Times, the taxation rate actually paid by businesses would not be as low as in Ireland. “If the [effective tax rate] is a couple of points beyond Ireland, we can be attractive”, Gramegna said. (Original version in French by Elodie Lamer)