Brussels: Europe and the Arabs
The European Commission has closed three in-depth state aid investigations into transfer price tax rulings granted by Luxembourg to Fiat and Amazon, and by the Netherlands to Starbucks. Following rulings by EU courts, the Commission found that the tax rulings did not give the companies selective advantages.
A statement issued by the Commission in Brussels said that in 2015 and 2017, the Commission found that Luxembourg granted selective tax advantages to Fiat and Amazon, and the Netherlands to Starbucks, in violation of EU state aid rules. In each case, the Commission found that the tax ruling issued by the national tax authority concerned artificially reduced the tax paid by each company and thus gave it a selective advantage over other companies. The EU courts ultimately overturned the Commission’s original decisions in all three cases, so the in-depth investigations into each remained open. Today, taking into account the guidance of the EU courts, the Commission has adopted three final decisions closing its in-depth investigations and confirming that, when granting their respective tax rulings, Luxembourg and the Netherlands did not grant these companies selective tax benefits contrary to EU state aid rules.

The Commission has been investigating tax rulings issued by Member States under EU state aid rules since 2013. Tax rulings themselves are not an issue under EU state aid rules if they simply confirm that tax arrangements comply with the relevant tax legislation. However, tax rulings that grant a selective advantage to specific companies could distort competition within the EU single market, in violation of EU state aid rules.

In October 2015, the Commission found that a tax ruling issued by the Luxembourg authorities in 2012 gave a selective advantage to Fiat and unduly reduced its tax burden since 2012 by between €20 and €30 million. In November 2022, the Court of Justice overturned a 2019 ruling by the General Court, which had upheld the Commission’s 2015 decision, and quashed the decision. The Court of Justice found that the Commission had used the wrong criteria in its investigation.

In October 2015, the Commission found that a tax ruling issued by the Dutch authorities in 2008 had given a selective advantage to Starbucks, which had unduly reduced its tax burden since 2008 by €20 to €30 million. In September 2019, the General Court overturned the Commission’s decision and found that the Commission had not demonstrated that, through the tax ruling, the Netherlands had granted a selective advantage to Starbucks.

In October 2017, the Commission found that a tax ruling issued by Luxembourg in 2003, and extended in 2011, had unduly reduced the tax paid by Amazon in Luxembourg by approximately €250 million. In May 2021, the General Court annulled the Commission’s decision, which concluded that the Commission had not established a selective advantage. The Court of Justice confirmed the annulment in December 2023.