On 3 September 2012, the Luxembourg tax authorities adopted a tax ruling in favour of Fiat Chrysler Finance Europe (“FFT”).
This tax ruling approved the method of determining FFT’s remuneration for these services, allowing FFT to determine its taxable profit on an annual basis for the purposes of Luxembourg corporate income tax.
In its decision of 21 October 2015, the Commission considered that this tax ruling entailed the grant of incompatible state aid and ordered its recovery.
Luxembourg and FTT each brought an action for annulment but the General Court confirmed the Commission’s decision in its judgment of 24 September 2019.
FTT and Ireland appealed against this judgment, in cases C-885/19 P and C-898/19 P respectively.
In its judgment delivered on 8 November 2022, the Court focused on the reference framework used by the Commission for the application of the arm's length principle to integrated companies in Luxembourg and the incorporation of this principle into national legislation, and annulled the Commission’s decision.
For further information : Court’s press release