The Luxembourg government today announced that it will appeal the European Commission’s October 21 decision that an advance pricing agreement (APA) issued by Luxembourg to a Fiat subsidiary amounted to illegal State because it allocated too little profit to Luxembourg. The Commission had ordered Luxembourg to recover from Fiat back taxes due on account of the aid.
“The Commission has used unprecedented criteria in establishing the alleged State aid, thus putting into jeopardy the principle of legal certainty,” the Luxembourg government said, denying it conferred any selective advantage to Fiat. The government said that legal action is needed to bring clarity and predictability to private tax rulings.
The Netherlands previously announced that it will contest an EU Commission decision, also reached October 21, finding that an APA granted by the Netherlands to a Starbucks subsidiary was illegal State aid.
Luxembourg’s decision comes one day after the Commission announced its third investigation into a Luxembourg tax ruling granted to a multinational corporation.
Yesterday, the Commission said it would investigate a ruling granted to a McDonald’s subsidiary that confirmed that the subsidiary did not have a permanent establishment in Luxembourg.
The Commission has also come to the preliminary conclusion that an APA granted by Luxembourg to an Amazon subsidiary is illegal State aid.
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