FIAT State Aid Case - Impact on Luxembourg

This article provides an overview of the facts and circumstances of the Fiat case, outlines the Luxembourg transfer pricing rules applicable to finance companies, and analyzes the decision of the General Court of the EU and its impact on Luxembourg.

On September 24, 2019, the General Court of the EU rendered its judgment (T-755/15 and T-759/15) regarding the action brought by Fiat Chrysler Finance Europe (formerly Fiat Finance and Trade Ltd, FFT) and Luxembourg for the annulment of the final state aid decision of the European Commission of October 21, 2015 on Fiat (SA.38375).

In its decision, the General Court dismissed the actions and confirmed the validity of the Commission’s decision in regard to a tax ruling granted by the Luxembourg tax authorities on September 3, 2012. The tax ruling endorsed a method for determining FFT’s remuneration for treasury and financing services rendered to other group companies.