The General Court today released a judgment that upheld the European Commission’s decision on a tax ruling as illegal state aid granted by Luxembourg to a multinational entity.
According to a release [PDF 162 KB] from the General Court:
In today’s judgment, the General Court dismissed the actions and confirms the validity of the EC’s decision. In part, the release from the General Court stated:
The Court makes clear that the arm’s length principle as described by the [EC] in the contested decision is a tool that allows the [EC] to check that intra-group transactions are remunerated as if they had been negotiated between independent companies. Thus, in the light of Luxembourg tax law, that tool falls within the exercise of the [EC] powers under Article 107 TFEU. The [EC] was therefore, in the present case, in a position to verify whether the pricing for intra-group transactions endorsed by the tax ruling at issue corresponds to prices that would have been negotiated under market conditions.
Read a September 2019 report prepared by KPMG’s EU Tax Centre
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