Luxembourg Tax Alert 2022-12
The CJEU annuls EU Commission State Aid decision on Luxembourg transfer pricing ruling
The CJEU annuls EU Commission State Aid decision on Luxembourg transfer pricing ruling
On November 8, 2022, the Court of Justice of the European Union (CJEU) gave its decision in joined cases C‑885/19 P and C‑898/19 P.
Both cases concern the validity of a State Aid decision issued by the European Commission (the EC) against a transfer pricing ruling granted by Luxembourg to an Italian car manufacturing group.
The case was first disputed in front of the General Court of the EU, which ruled in favor of the EC.
In the appeal brought before it, the CJEU concluded that the General Court was wrong to confirm the EC’s approach to apply an interpretation of the arm’s length principle not included in Luxembourg domestic rules.
Finding that the selectivity analysis was incorrect, the CJEU decided to set aside the General Court’s judgement and to annul the EC’s Decision.
Please refer to the Euro Tax Flash prepared by KPMG’s EU Tax Center for further information.
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