EU Court Scraps Order for Fiat Chrysler to Pay Millions of Euros in Back Taxes
November 08 2022 - 6:32AM
Dow Jones News
By Mauro Orru
The European Union's highest court scrapped an order from the
bloc's executive arm for Luxembourg to recover up to 30 million
euros ($30.1 million) in back taxes from Fiat Chrysler Automobiles
NV, bringing an end to a long-running case over purported tax
advantages.
The European Commission said in 2015 that Luxembourg had granted
Fiat--now part of Stellantis NV--selective tax advantages that had
reduced its tax burden since 2012 and ordered authorities in the
small country to reclaim between EUR20 million and EUR30 million
from the car maker. EU antitrust chief Margrethe Vestager said at
the time that rulings to artificially reduce a company's tax burden
contravened state aid rules in the bloc.
Luxembourg and Fiat lodged appeals before the General Court of
the European Union, the bloc's second-highest court, hoping to
annul the commission's order. However, the court upheld that order
in a ruling issued in 2019.
The Court of Justice on Tuesday scrapped that decision, saying
the General Court committed an error of law when it validated the
commission's approach.
"The General Court was wrong to endorse the approach consisting
in applying an arm's length principle different from that defined
by Luxembourg law, confining itself to identifying the abstract
expression of that principle in the objective pursued by the
general corporate income tax in Luxembourg and to examining the tax
ruling at issue without taking into account the way in which the
said principle has actually been incorporated into that law with
regard to integrated companies in particular," the Court of Justice
said in a statement.
Ms. Vestager said the commission would carefully study the
judgment and its implications. Stellantis didn't immediately
respond to requests for comment.
Fiat Chrysler Automobiles NV and Peugeot-maker PSA Group merged
in 2021 to create Stellantis.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
November 08, 2022 06:17 ET (11:17 GMT)
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