On Friday 4 December 2015, the Luxembourg government announced its decision to appeal the European Commission's decision regarding the Fiat case, whereby Luxembourg was accused of allocating undue tax exemptions to the car manufacturer.
In a statement issued today, the Ministry of Finance commented that "the vast majority of EU member states use tax ruling to provide legal certainty for the taxpayer", claiming that the Commission had drawn on "unprecedented criteria" in determining that the State had selectively granted tax advantages to Fiat which had subsequently put "into jeopardy the principle of legal certainty".
The decision followed a previous statement issued by the Luxembourg authorities in October regarding the conclusions drawn by the Commission, in which the Government insisted it adheres to "international standards, in particular those relating to the arm's length principle applicable with respect to transfer pricing". However, European Commissioner Margrethe Vestager, in charge of competition policy, claimed the Grand Duchy's tax rulings were "not in line with EU state aid rules", essentially terming them "illegal".
Today's statement further declared Luxembourg as "strongly committed to tax transparency" and in compliance with "the OECD/G20 BEPS project, which will modernise international tax rules and create a global level playing field" , which has recently been advocated by Minister of Finance Pierre Gramegna.
News of the appeal decision arrived the day after the European Commission took the decision to open a separate investigation into a potential tax exemption afforded by the Luxembourg State to fast food chain McDonald's.
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