Top Court Rejects EU Tax Ruling On Fiat-Chrysler

The European Union’s top court on Tuesday overturned a decision requiring automaker Fiat Chrysler to pay up to €30 million in back taxes to Luxembourg.

The European Commission had ruled in 2015 that the 2012 tax ruling by Luxembourg authorities toward Fiat Chrysler Finance Europe, which provided treasury services and financing to the companies of the group established in Europe, was in breach of the bloc’s state aid rule.

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The EU’s General Court, a constituent court of the Court of Justice of the European Union, had sided with the Commission in 2019 following appeals from both Luxembourg and Fiat Chrysler Finance Europe.

But the Court of Justice of the EU said on Tuesday that the commission failed to take into account the typical tax laws in Luxembourg when it was determining whether the automaker got a tax advantage and that the EU’s General Court “committed an error of law” in upholding that approach three years ago.

EU Competition Commissioner Margrethe Vestager said on Twitter that the ruling amounted to “a big loss for tax fairness.”