The hunt for rulings is not over

A divine surprise for the Grand Duchy on November 8 the previous year: The Court of Justice of the EU annulled the European Commission's decision that its legislation on transfer pricing, i.e. the financing of an entity by another entity of the same group, constituted State aid. The Luxembourgish State did not bother to appeal to the Court of Justice after being dismissed by the EU General Court in 2017. It is above all a question of reputation for a country that wants to show that it has come back into line after having long been considered a tax haven. It was Fiat Chrysler Finance Europe, then Fiat Finance & Trade, that continued the fight to the end.

Seven years after the European Commission's decision to consider transfer prices in Luxembourg as illegal State aid, the Court of Justice ruled in favour of the Grand Duchy. In its view, the Commission did not demonstrate that "the national law [was] inconsistent with the objective of non-discriminatory taxation of all resident companies" nor that it "systematically led to an undervaluation of the transfer prices applicable to integrated companies or to certain of them, such as finance companies, in relation to market prices for comparable transactions carried out by non-integrated companies".