Brussels, 04/12/2015 (Agence Europe) - On Friday 4 December, the government of Luxembourg announced that it will be appealing against the European Commission's decision on Fiat Finance and Trade.
In October, the Commission ordered the recovery by Luxembourg of what it considers to be unlawful state aid granted to Fiat through a tax ruling (see EUROPE 11415). The amount to be recovered is between €20 and €30 million.
Luxembourg explains in a press release that it “has decided to appeal the European Commission's decision in the Fiat case, in order to seek legal clarity and previsibility on the practice of tax rulings. The vast majority of EU member states use tax rulings to provide legal certainty for the taxpayer. In its decision, the Commission has used unprecedented criteria in establishing the alleged State aid, thus putting into jeopardy the principle of legal certainty. In particular, the Commission has not established in any way that Fiat received selective advantages within the meaning of article 107 TFEU.”
The Commission says that because Fiat Finance and Trade carried out activity comparable to that of a bank, its taxable profits could be calculated in the same manner as for a bank, in other words by calculating the return on capital used by the company for its financing activities. The Commission felt that the tax ruling gave approval to an artificial and extremely complex method that was not suitable for the calculation of taxable profits in market conditions and artificially reduced the tax paid by Fiat Finance and Trade. (Original version in French by Elodie Lamer)